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Indian stock market and companies daily report (February 19, 2013, Tuesday)

Contributed by Angel Broking

The Indian market is expected to open flat to positive, mirroring SGX Nifty which is trading marginally higher in the opening trades. The major Asian indices are trading on a mixed note after the minutes of last monthRs.s Bank of Japan meeting indicated that JapanRs.s economy remains relatively weak.

The US markets were closed on Monday following the PresidentRs.s Day holiday. The European markets traded mostly lower, amid no major announcement on the earnings or economic data front.

Back home in India, the domestic market moved in a narrow range before ending modestly higher. Stocks pared early gains, tracking mixed European cues and weak industrial metal prices. However, the underlying sentiment remained slightly cautious as global ratings agency MoodyRs.s warned that a continued rise in IndiaRs.s current-account deficit is Rs.credit negativeRs. for the country. It also stated that the rising current account deficit and external debt may impact the nationRs.s credit risk profile. Going ahead, the domestic investors would be watchful of the developments on the Union Budget front. The market participants would also keep an eye on US economic data that is scheduled to be released in the week, including reports on housing starts, existing home sales, and consumer and producer price inflation.

Markets Today

The trend deciding level for the day is 19,506 / 5,896 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 19,549 - 19,598 / 5,913 - 5,928 levels. However, if NIFTY trades below 19,506 / 5,896 levels for the first half-an-hour of trade then it may correct up to 19,458 - 19,415 / 5,881 - 5,863 levels.

Telecom Commission allows 4G airwave holders to offer voice services

The Telecom Commission gave an approval to companies having internet service licenses and holding 4G spectrum to offer phone calls services by paying additional fee of Rs.1,658cr each. The Telecom Commission decision, if finally approved by Telecom Minister Kapil Sibal, will allow companies such as Mukesh Ambani-led Reliance Jio Infocomm (RJI), Augere, and Tikona Digital among others to offer mobile phone service using BWA spectrum that they won in 2010 auction. The framework for new licenses will be ready by end of this financial year. In 2010, six private players - RJI, Bharti Airtel, Aircel, Qualcomm, Tikona Digital and Augere had won BWA spectrum. This decision has a direct bearing on Reliance Industries backed RJI, which had sought the Department of TelecomRs.s permission to offer voice services on top of its broadband spectrum. We continue to remain Neutral on the telecom sector.

CEC recommends mining to restart in Karnataka

Central Empowered Committee (CEC) has recommended Supreme Court to permit resumption of production of iron ore from category A mines. CEC has also recommended that permission be given for mining operations for category B mines after some specified R&R conditions are met by the miners. The speedier commencement of production from mines in Karnataka is likely to be positive for JSW Steel and Sesa Goa. However, we remain skeptical on the speedier commencement of mining in Karnataka as we believe R&R compliance by miners is likely to take some more time for category B mines. Until further update, we maintain our Neutral rating on JSW Steel.

3QFY2013 Result Previews

GSK Pharmaceuticals (CMP: Rs.2,095/ TP: -/ Upside: -)

For 4QCY2012, the company is expected to post net sales of Rs.680cr. The Gross Margins are expected to be around 57.4% and the OPMs are expected to come to 26.8%. Overall, the net profit came in at Rs.132.4cr, a dip of 10.1%. We recommend a Neutral on the stock.

Economic and Political News

- India likely to take more steps to curb gold imports: MMTC

- India allows 4G holders to offer voice services

- Nearly 209 co-operative banks need to raise Rs.4,024cr by 2014-15: RBI

- Room for monetary easing limited, says RBI governor

Corporate News

- Dabur launches new toothpaste

- GAIL commissions Rs.4,500cr Dabhol-Bengaluru gas pipeline

- Unilever to set up EUR50mn deodorant plant in Maharashtra

- Wipro Infotech bags 10 year contract from MIAL