Nifty ends with modest gains; Bharti, Idea plunge 8 per cent
12 May 2010
The benchmark Nifty closed with marginal gains after a volatile session; especially due to lack of global cues. European debt worries eased off a bit for the time being post European Union/IMF's USD one trillion package. The markets completely shrugged off less-than-expected Index of Industrial Production (IIP) numbers for the month of March 2010.
Bharti Airtel and Idea Cellular were the biggest losers on the Nifty, cracked 8% each post TRAI recommendations. Reliance Communications was flat. The Telecom Regulatory Authority of India (TRAI) has suggested a 10 Mhz (GSM) spectrum cap for Delhi and Mumbai, and 8 Mhz cap for the rest of India. For CDMA players, the spectrum cap stands at 5 Mhz.
The industry might have to shell out additional Rs 10,000-15,000 crore to pay for extra spectrum. Mahesh Prasad, Group President of Reliance Communications stated the impact of the TRAI recommendations on the industry is likely to be Rs 10,000-15,000 crore.
Commenting on the implications of these TRAI's suggestions, Bhavesh Gandhi of India Infoline said Bharti could be impacted by Rs 20-25 per share and Idea by Rs 8-9 per share.
The industrial productivity number for March came in at 13.5% as compared to 15.1% month-on-month. For FY10, the Index of Industrial Productivity (IIP) stood at 10.4% as against 2.8%. A CNBC-TV18 poll had expected March IIP at 14.9%.
Robert Prior-Wandesforde, Senior Asian Economist of HSBC Holdings Plc and Abheek Baruah, Chief Economist of HDFC Bank were disappointed with the IIP numbers.
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