Monday April 2, 01:30 PM
Losing further ground |
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By Equitymaster.com
The indices lost further ground during the previous hour of trade, as strong selling activity was seen in the index heavyweights. The advance-decline ratio is currently poised at 1 to 49 on the NSE Nifty. While buying interest is witnessed in sugar stocks, selling pressure is seen across other sectors.
The BSE Sensex is trading at 12,613 (down 459 points) while the NSE Nifty is trading at 3,682 (down 139 points). The rupee is trading at 43.21 to the dollar.
Media stocks are under selling pressure. While marginal gain is witnessed in ETC networks (1% up), selling pressure is seen in Zee Entertainment and NDTV (down 3% each). TDSAT has asked Zee to make available 19 channels from its bouquet to TataSky since Zee was not able to convince about a regulatory obligation of "must carry" on DTH operators. Any broadcaster cannot force any DTH operator to take 'all or none' of its channels. This judgment comes in the light of limitations of transponder space as well as the interest of consumers. It is physically not possible for TataSky to carry all channels of Zee. Moreover, buying all channels of Zee would mean increased cost for the operator that shall be passed on to the consumer. This step will hurt Zee's subscription revenues, as it will enable DTH operators like TataSky to pick and choose rather than buying the entire bouquet. With few more players lined up to enter the DTH space, potential revenues lost for the company could be even higher.
With the recent surge in crude oil prices, derivate products are also expected to become costlier, ATF or jet fuel being no exception. After falling to the lows of US$ 50 per barrel, the crude oil has risen back to the levels of above US$ 60 per barrel. This is likely to increase the operating cost for the air carriers. It is worth noting that 40% of an airline carrier's operating cost comprises of fuel cost. Thus, in order to prevent margin erosion, domestic air carriers are likely to increase the fares by increasing the fuel surcharge. Fierce competitive environment can act as spoil sport with carriers not being able to pass on the complete hike in the fuel cost. Selling pressure marks trading in Spicejet and Deccan Aviation (both 2% down).
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