After opening in the green, the Indian indices have given up the early gains and are trading flat during the morning session. FMCG and capital goods stocks leading the gainers while IT and energy stocks are trading in the red. Mid and small cap stocks are witnessing buying interest.
Engineering stocks are currently trading higher, led by the stocks of Elecon Engineering and KSB Pumps. As per a leading business daily, the government has put in place a plan to locally manufacture as many as 181 products that are currently being imported into India. This and the resultant capacity creation across sectors like power, oil and gas, and automobile manufacturing could give a big boost to the sagging fortunes of the capital goods industry due to the slowdown the economy has been witnessing. In fact, as part of the plan, the government may declare capital goods as a priority sector for lending at lower rates of interest. It may even exempt locally made capital goods from excise duty.
Telecom stocks are trading mixed today. While Idea Cellular is leading the gainers; Tata Teleservices is leading the losers. As per a leading financial daily, the procedures for the upcoming spectrum auctions are on in full swing. The Department of Telecom (DoT) has proposed the date of 23 Feb 2015 for the auctions. The government in turn will take its final decision by floating the notice inviting application (NIA) by the end of this year. By then the government also hopes to resolve the issue regarding the spectrum to be vacated by the defense ministry. However, in a blow to telcos, the government might split the auctions based on 2G and 3G services with 2G airwaves being offered in Feb and 3G airwaves being offered only in May 2015. This would have the effect of limiting the amount of spectrum in both auctions and thus would lead to more intense bidding.