Market seen subdued on negative Asian equities

The market is likely to decline in opening trade on negative Asian cues. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 21.50 points at the opening bell. Telecom stocks will be in focus after Kapil Sibal announced new telecom policy after market hours on Wednesday.

Telecom stocks may see action after the government on Wednesday announced the new telecom policy (NTP) allowing operators to hold higher spectrum, pay uniform license fee across services besides permitting liberal merger and acquisition, with a view to provide quality services at affordable prices. Announcing a part of policy, Telecom Minister Kapil Sibal said that "the prescribed limit on spectrum assigned to a service provider will be 2x8 MHz (paired spectrum) for GSM technology for all service areas other than Delhi and Mumbai where it will be 2x10 MHz (paired spectrum)." Current prescribed limit is 6.2 MHz of GSM spectrum. However, players would be free to acquire additional frequency beyond the prescribed limit, in the open market, should there be an auction of spectrum subject to the limits prescribed for merger of licenses.



All spectrum would be delinked from the licence from now, he said, adding that a decision on pricing of spectrum or one-time charge for extra spectrum held by some incumbent operators would be taken later in view of the Supreme Court judgement that cancelled 122 2G licences issued in 2008.

Kapil Sibal also announced a uniform licence fee of 8% of Adjusted Gross Revenue (AGR) across services and circles as compared to range of 6-8% now. Licence fee is a levy paid by all operators as the annual fee.

Airline stocks will be in focus after the state-owned oil marketing companies slashed jet fuel prices by a marginal Rs 350 per kilolitre, the second reduction in this month.

Key benchmark indices edged higher for the third straight trading session on Wednesday, 15 February 2012 as world stocks rose. The BSE Sensex jumped 353.84 points or 1.98% to settle at 18,202.41, its highest closing level since 1 August 2011.

Foreign institutional investors (FIIs) bought shares worth a net Rs 1838.85 crore on Wednesday, 15 February 2012, as per provisional data from the stock exchanges. FIIs have bought shares worth a net Rs 11427.53 crore in first 11 trading sessions this month, as per provisional data from the stock exchanges. The inflow this month comes on the top of heavy purchases last month. FIIs bought shares worth a net Rs 10357.70 crore in January 2012, as per data from Securities & Exchange Board of India (Sebi).

The wholesale price index (WPI) rose a slower-than-expected 6.55% in January 2012 from 7.47% rise in December 2011, government data showed on Tuesday, 14 February 2012. The annual reading for November 2011 was revised upwards to 9.46% from 9.11% reported earlier.

After a gap of nearly nine years, the Reserve Bank on Monday, 13 February 2012, increased the bank rate by 350 basis points to 9.5% with immediate effect. "This (the increase) should be viewed and understood as one-time technical adjustment to align the Bank Rate with the marginal standing facility (MSF) rate rather than a change in the monetary policy stance," RBI said in a notification. The Bank Rate has lost its significant as a monetary policy tool as the central bank presently signals stance through changes in repo, the rate at which banks borrow short-term funds from RBI.

The Indian economy is estimated to grow 6.9% in the current fiscal year through March 2012 (FY 2012), sharply slower than the 8.4% expansion reported last year, according to a government forecast released on Tuesday, 7 February 2012. The new expectation is due to weaker growth in manufacturing and farm output, data from the ministry of statistics and implementation showed. The government expects manufacturing output to grow 3.9% this fiscal year compared with a 7.6% increase a year earlier. Farm output is expected to rise 2.5%, compared with 7% last year. In December 2011, the government had cut its growth projection for FY 2012 to between 7.25% and 7.75% from an initial forecast of 9%.

Finance Minister Pranab Mukherjee will present the annual budget for 2012/13 on 16 March 2012, while the railways budget will be presented on 14 March 2012. The budget session of parliament will start on 12 March 2012, Pawan Kumar Bansal, minister of parliament affairs, said recently. The government will present on March 15 the Economic Survey for 2011/12, a document on the state of economy prepared by the economic division in the ministry of finance. The annual budget is usually presented on the last working day of February. However, the budget has been delayed this time due to the ongoing assembly polls. Polling for assembly elections in five states concludes in early March 2012.

Reports indicate that the finance ministry is considering a proposal to increase excise duty from 10% to 12%, although still lower than the level before the 2008 financial crisis. The move is aimed at helping the government improve its fiscal situation but it is expected to push up the cost of almost all manufactured goods from food products to consumer durables and automobiles.

Gross domestic product across the 17-nation euro zone contracted by 0.3% in the final three months of 2011 compared to the previous quarter, the European Union statistics agency Eurostat said in a preliminary estimate released Wednesday.

Asian stocks declined on Thursday as optimism was dashed by another delay in cementing a crucial bailout for stricken Greece. Key benchmark indices in Taiwan, China, South Korea, Hong Kong, Indonesia, Singapore and Japan were down by between 0.07% to 1.08%.

Reports indicated that after a three-hour teleconference between euro zone finance ministers, questions remain over the euro zone's bailout of Greece, putting off any decision over the matter until Monday at the earliest.

US stocks fell on Wednesday for the third session in four. The fall was triggered by a sharp decline in Apple shares which fell on rumors that a powerful exchange-traded fund that tracks Nasdaq stocks would sell Apple. The Dow Jones industrial average dropped 97.33 points, or 0.76%, to 12,780.95. The Standard & Poor's 500 Index lost 7.27 points, or 0.54%, to 1,343.23 and the Nasdaq Composite index fell 16.00 points, or 0.55%, to 2,915.83.