Markets open higher, Telecom shares rise

Markets have started the trading session on a higher note after witnessing a sharp fall yesterday.

By 9:40, the Sensex was higher by 80 points at 19,931 mark and the Nifty gained by 21 points at 5,976 levels.  

Amid concerns over a weakening rupee, dwindling capital inflows and a widening current account deficit, the country on Tuesday moved a step closer to overhauling its foreign direct investment (FDI) policy as it lifted caps for the telecom sector and asset reconstruction firms, besides tweaking norms for 13 sectors. Telecom stocks are buzzing in opening trades.

According to the technical charts “We could see some more upside in the near term, and the Nifty may look to stretch the rally to 6,100-odd levels. However, failure to sustain above 6,000-mark can trigger profit taking and the index can slip to near about 5,900-level.

US stocks eased in low volume on Tuesday, with the S&P 500 snapping its eight-day winning streak after disappointing sales from Coca-Cola. Investors turned cautious on the day before the Federal Reserve chairman's congressional testimony.  

The Dow Jones industrial average was down 32.33 points, or 0.21%, to end unofficially at 15,451.93. The Standard & Poor's 500 Index was down 6.25 points, or 0.37%, to finish unofficially at 1,676.25. The Nasdaq Composite Index was down 8.99 points, or 0.25%, to close unofficially at 3,598.50.  

Asian shares inched higher on Wednesday, while the dollar held a three-week low on expectations Federal Reserve Chairman Ben Bernanke will reiterate later in the day that US monetary policy is to stay accommodative.   

Bernanke is set to testify to Congress on Wednesday and Thursday, which could provide further clarity on when the US central bank will roll back its $85 billion a month bond-buying programme.  

Asian shares, as measured by MSCI Asia-Pacific ex-Japan index, added 0.2%.   Tokyo's Nikkei share average dropped 0.7%, while Australian shares put on 0.2%.

Back home, the rupee today strengthened by 21 paise to hit a fresh two-week high of 59.10 in early trade at the Interbank Foreign Exchange market, after the government liberalised FDI limits in a dozen sectors.

BSE Consumer Durable, Capital Goods, Power, FMCG and TECk indices have surged by 1% each. However, BSE Bankex has declined by nearly 1%.

Telecom shares like Bharti Airtel, Idea Cellular, MTNL, RCom and Tata Teleservices have gained between 2-5%. The Prime Minister-chaired meeting yesterday gave in-principle approval to remove a foreign direct investment cap in the telecom sector, while raising the limit to 49% in defence production from existing 26% with caveats.

The main gainers on the Sensex at this hour include M&M, Dr Reddy’s, NTPC, ITC and L&T.

On the losing side, HDFC Bank, Tata Motors, Cipla, ICICI Bank and CIL have declined between 0.3-1%.

State-owned miner Coal India Ltd (CIL), which plans to invest Rs 6,000 crore in foreign acquisitions in FY14, is evaluating buying stakes in three coal assets in Australia to bridge the shortfall in its domestic production, sources said.

Among other shares, Development Credit Bank (DCB) is trading higher by 3% at Rs 51.25 in opening deals on BSE after its net profit more-than-double to Rs 43 crore for the quarter ended June 30, 2013 (Q1FY2014) due to one time treasury gains. The private sector bank had posted profit of Rs 19 crore in a year ago quarter.

Sabero Organics Gujarat has rallied 11% to Rs 117 after reporting a net profit of Rs 9.45 crore for the quarter ended June 30, 2013 (Q1) on back of strong operational income. The agrochemicals company had net loss of Rs 1.89 crore in a year ago quarter.

The market breadth in BSE remains positive with 643 shares advancing and 308 shares declining.