After trading firm during post noon trading session, the Indian equity markets managed to hold ground and ended the day on a flat note. While the BSE Sensex today closed higher by 102 points, the NSE-Nifty closed higher by 23 points. Even the Smallcaps and Midcaps closed marginally higher with both the BSE Mid Cap and BSE Small Cap indices recording gains of 0.5% and 0.3% respectively. Barring stocks from Oil & Gas, Consumer Durables and IT space, all the sectoral indices closed in green. Healthcare stocks were the biggest gainers today.
As regards global markets, Asian indices closed mixed today with a downward bias. The rupee was trading at Rs 59.2 to the dollar at the time of writing.
The RBI has no plans to increase the foreign investment limit in government bonds. Presently, the FII limit for investment in government bonds is US$30 bn; segregated as US$20 bn for all and US$10 bn for specific investors like foreign banks etc. It appears that the US$ 20 bn limit has been fully exhausted. And there were expectations that government will raise the limit to attract more investors. However, the speculation has been put to rest with RBI maintaining a status quo on the limit. While increasing the limit would have attracted more foreign funds and led to appreciation in Rupee, RBI is cognizant that such a step could also backfire if foreign investors suddenly decide to withdraw the same money in the future amidst any uncertainty. This may put unnecessary pressure on Rupee and make our currency extremely volatile. Hence, the decision to limit foreign investor participation in the bond market was a step in the right direction.
Telecom stocks ended the day on a weak note with Bharti Airtel and AGC Networks Ltd leading the losses. However, Tata Teleservices and Himachal Futuristic Ltd ended the day in the green. In 4QFY14, total gross revenue of telecom service companies increased by 5.7% YoY to Rs 573.7 bn. Both the license fees and spectrum charges paid to the government also increased during the quarter. With respect to revenue breakdown Bharti Airtel reported the highest revenue for the quarter followed by Vodafone India. It may be noted that India's telecom market has matured over the years. While the voice revenue still dominates the overall sales pie the share of data revenue is gradually increasing over the years. Though below global average, the advent of 3G means that the share of data revenues is likely to increase in the future from the current levels.