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After opening the day on a flattish note, the Indian stock markets have continued to trade near the dotted line. Sectoral indices are trading on a mixed note with stocks from the capital goods, telecom and power sectors leading the gains. IT stocks are trading in the red.
The BSE Sensex is trading up by 30 points (up 0.1%) and the NSE Nifty is trading up by 2 points (up 0.02%). The BSE Mid Cap index and the BSE Small Cap indices are trading in the green, up by 0.3% and 0.6% respectively. The rupee is trading at 66.74 to the US$.
Crude oil is witnessing buying interest this week. The commodity hit its 2016 highs yesterday and US crude settled above US$ 50 a barrel. This was due to reports that showed a higher-than-expected crude draw in the US inventories during the last week. Also, worries about global supply shortfalls on the back of attacks on Nigeria's oil industry aided the rally.
These gains are followed by losses witnessed during last week after the much-awaited OPEC meet went off with no decision on the freeze of crude supplies.
The Organization of the Petroleum Exporting Countries (OPEC) members failed to change the oil output policy at the meeting scheduled in Vienna last week. This came as Iran insisted on steeply raising its production. This was seen as yet another failure by oil producers after they failed to agree on a production cap during the summit in Doha earlier in April.However, some respite was found as Saudi Arabia promised not to flood the market and sought to mend fences within OPEC. Also, Saudi Arabia's oil minister stated that oil prices have recovered and this recovery will continue.
All eyes are now on official inventory numbers by the US Energy Information Administration (EIA) that are going to be released today.
At the time of writing, crude oil was trading at Rs 3,374 per barrel, up by around 0.9%. Do read what Richa Agarwal, research analyst at Equitymaster, has to say on the future prospects of crude oil prices. Also, an entry in Vivek Kaul's Diary offers some insights on why oil prices will touch US$100 per barrel again.
To keep a regular tab on the movements in crude oil prices, you can read weekly market commentary from the Daily Profit Hunter team. Their weekly commentary tracks the developments in the global economy as well as equity, currency and commodity markets.
As per a leading financial daily, the Telecom Commission (TC) has lowered the annual spectrum usage fee for telecom operators to 3% of adjusted gross revenue for all bands in the upcoming auction that is going to be held in July. The commission has also kept the charge for using broadband wireless access (BWA), or 4G spectrum, bought in the 2010 auctions, at 1% of revenue.
As per the new formula, weighted average will be calculated between broadband wireless access (BWA) spectrum, the current spectrum usage charge (SUC) rate and the spectrum that will be acquired in future by the company.
Also, to prevent the revenue loss for the government, if new SUC computation leads to a lower payout, telecom operators will pay a minimum amount they are paying as per 2015-16 rates. The annual SUC collection as per present levels is at around Rs 70 billion.
Department of Telecommunications (DoT) is going to move the Cabinet note on spectrum auction in a week for inter-ministerial consultations.
If all the spectrum on offer is sold at base prices, it will fetch around Rs 5,440 billion for the government.
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