BSE Sensex, Nifty overbought: Wednesday Closing Report

Nifty has to be break out from today’s high for the upmove to continue. Watch for a close below today’s low for a short-term decline

The market settled in the positive on hopes that the government would be able to muster the requisite numbers for the FDI in retail issue to sail through in the Lok Sabha. A vote on the issue is expected to take place after the market closes for the day. In a narrow range of 26 points, today the Nifty witnesses a very volatile session. The benchmark, for the first time since 15 April 2011, hit its highest close of 5,901, although it was a positive flat ending as compared to yesterday. Now the Nifty has to be break out from today’s high for the upmove to continue. However, watch for a close below today’s low for a short-term decline. The National Stock Exchange (NSE) saw a volume of 87.94 crore shares and an advance-decline ratio of 1095:704.


The domestic market opened in the positive on hopes that the government would get the required number of votes in the Lok Sabha to allow foreign direct investment (FDI) in multi-brand retail. On the global front, the US markets closed with minor losses on concerns about the budget deal. Markets in Asia were mostly higher on assertions from the Chinese Communist Party’s Politburo which said that the government will not disturb the economic policies, needed to spur growth.


Back home, the Nifty opened 18 points higher at 5,907 and the Sensex started the day at 19,398, a rise of 50 points over its previous close. Support from metal, capital goods, realty and auto sectors led the indices to their highs in initial trade. At the highs, the Nifty rose to 5,918 and the Sensex went up to 19,463.


However, profit booking at the highs saw the benchmarks paring part of their early gains on a weakness in IT and technology stocks. Bargain hunting at the lows saw the market gradually move higher in the noon session. A positive opening of the key European indices also supported investor sentiment.


A strong bout of selling in the late session resulted in the benchmarks touching their lows. At this point the Nifty slipped to 5,891 and the Sensex fell to 19,371. But the indices managed to close off the lows following a bounce back seen towards the end of the trading session.


The Nifty added 11 points to 5,901 and the Sensex settled at 19,392, up 44 points.


The broader indices outperformed the Sensex today, as the BSE Mid-cap gained 0.46% and the BSE Small-cap index advanced 0.52%.


The top sectoral gainers were BSE Realty (up 2.81%); BSE Metal (up 1.61%); BSE Oil & Gas (up 0.74%); BSE Bankex (up 0.67%) and BSE PSU (up 0.51%). The losers were BSE IT (down 1.22%); BSE TECk (down 0.93%); BSE Power (down 0.46%0 and BSE Healthcare (down 0.10%).


Fifteen of the 30 stocks on the Sensex closed in the positive. The main gainers were Sterlite Industries (up 5.37%); Hindalco Industries (up 3.38%); Tata Steel (up 2.13%); State Bank of India (up 1.38%) and Tata Motors (up 1.33%). The key losers were Tata Power (down 3.67%); Infosys (down 1.93%); Wipro (down 1.83%); Bajaj Auto (down 1.51%) and Mahindra & Mahindra (down 0.94%).


The top two A Group gainers on the BSE were—Sterlite Industries (up 5.37%) and Allahabad Bank (up 4.94%).

The top two A Group losers on the BSE were—United Breweries (down 12.64%) and Tata Power (down 3.67%).


The top two B Group gainers on the BSE were—Maharashtra Scooters (up 20%) and Today’s Writing Instruments (up 20%).

The top two B Group losers on the BSE were—Spectacle Infotek (down 11.19%) and Ajcon Global Services (down 10.14%).


Out of the 50 stocks listed on the Nifty, 30 stocks settled in the positive. The major gainers were Sesa Goa (up 5.27%); DLF (up 4.46%); Hindalco Ind (up 3.37%); Punjab National Bank (up 3.07%) and BPCL (up 2.32%). The chief losers were Tata Power (down 3.36%); Infosys (down 2.02%); Wipro (down 1.71%); HCL Technologies (down 1.41%) and UltraTech Cement (down 1.34%).


Markets in Asia closed firm as the Chinese government remained committed to keeping economic policies intact in order to boost growth. A rule curbing investments by Chinese insurance companies in the country’s commercial banks supported banking and insurance stocks.


The Shanghai Composite jumped 2.87%; the Hang Seng surged 1.35%; the Jakarta Composite gained 0.40%; the KLSE Composite rose 0.38%; the Nikkei 225 advanced 0.39%; the Straits Times climbed 0.45%; the Seoul Composite advanced 0.61% and the Taiwan Weighted settled 0.63% higher.


At the time of writing, the key European indices were trading with marginal gains and the US stock futures were in the positive.


Back home, foreign institutional investors were net buyers of equities totalling Rs539.96 crore on Tuesday whereas domestic institutional investors were net sellers of stocks amounting to Rs434.10 crore.


US-based drug firm Eli Lilly and Co and domestic pharma major Strides Arcolab today said they have entered into a pact to expand marketing of generic cancer medicines in the emerging markets. As a part of the arrangement, Eli Lilly will in-licence a portfolio of branded generic injectible and oral cancer medicines from Agila Specialties, the specialties division of Strides Arcolab, the companies said in a joint statement. Strides Arcolab dropped 3.92% to Rs1,148 on the NSE.


BPO service provider Firstsource Solutions today said it has repaid $237 million (Rs1,291 crore) worth foreign currency convertible bonds (FCCBs) on the due date of 4 December 2012.The redemption was funded by way of the company's cash reserves augmented with the preferential allotment of shares made to Spen Liq Private and external borrowings, it said in a statement. The stock closed 1.25% higher at Rs12.15 on the NSE.


Turnkey engineering major Shriram EPC has bagged a $230 million contract for setting up a storm water and sewer system in Basra, Iraq. The order involves setting up a basic sanitary system in Basra, including engineering, supply, installation of pipelines, pumping stations and road works. The order will be carried out through a joint venture with the Mokul Group, a service provider with a global presence across diverse industries. Shriram EPC soared 16.01% to settle at Rs79 on the NSE.


No cartelisation in fixing saving deposit rates: SBI

According to SBI MD Gupta, the bank's decision not to raise interest rates on savings deposits is a purely commercial one and does not amount to cartelisation


Mumbai: The nation's largest lender State Bank of India (SBI) on Wednesday dismissed allegations of cartelisation by big banks in keeping savings deposit rate unchanged despite the Reserve Bank of India (RBI) deregulating this over a year ago, reports PTI.

Disputing the charges, SBI Managing Director and Chief Financial officer Diwakar Gupta said the bank's decision not to raise interest rates on savings deposits is a purely commercial one and does not amount to cartelisation.

"I said it is not cartelisation," Gupta told reporters on the sidelines of a conference organised by consulting and accounting major PwC here.

SBI and its five subsidiaries control, which nearly control 25% of the banking system, have not increased their savings account deposit rates. They offer 4%.

Gupta said he has been reading reports over the past few days about a possible action by the competition watchdog on banks for allegedly acting as a cartel by not increasing the rate on saving deposits, which was deregulated by the Reserve Bank in the October 2011 credit policy.

The interest rate on savings accounts was the only regulated product in banking till the RBI deregulated it.

Following this, only two commercial banks -- Kotak Mahindra and Yes Bank -- raised the deposit rates to 6 and 7% respectively. These banks, which were facing problems in raising the low-cost CASA (current account, savings account) deposits in the past, claim the move has been immensely beneficial.

From the cooperatives space, city-based Saraswat Bank had also increased the rate to 7%.

Other banks currently offer just 4% on an annualised basis to savings bank account holders, which was even lower at 3.5% till April 2011.

"The fact is that if I move rates by 1%, it costs me a billion dollars. I will never do it. Because nobody else does it, there will always be this question whether this is cartelisation," Gupta said.

Right from the day one, SBI has been maintaining that it will not be the first one to increase rates, he added.

In a discussion on competition regulation at the PwC summit, Gupta said: "It is absolutely within the domain of the regulator to look at anything. But in the short-term, the industry then tends to become tentative when this kind of thing happens."

"I think regulators have done a great job. At the same time, the regulatory action cannot be in the best interest of the industry some times... I think somewhere, we do need to see if regulation is assisting the overall framework.

"I think the same is true for telecom, the same is true for mining, aviation etc.," Gupta added.

On the issue of judicial intervention in business matters, he said while staying a matter is fair legally, the judiciary should be sensitive to cost overruns if a proposal gets stuck.

"In an economy where 14% is the cost of credit, if a project is delayed by two-and-a-half years, it is absolutely unviable...that is something which is important for the judicial process to recognise," he said.

Banks have been hit as demand for project finance has reportedly dried up. With corporate loan demand now restricted to working capital funds, banks are now shifting focus on the retail borrowers.




Pankaj Mehta

5 years ago

By their own admission, SBI is keeping 3 billion dollars of customers money (7% - 4%) with 3% less interest than YES bank (surely YES bank is still profitable with 7% interest paid).

siddharth biswal

5 years ago

cost of deposits can never be same for all PSU banks as well as Pvt banks,then how come rates are same.If SBI had increased then others would have followed too.Firstly all PSU banks should be merged into 2-3 entities to benefit from synergy as they duplicate efforts without any added benefit.SB rate shd be linked to Govt bond rate.

Trying to help revive Kingfisher: SBI

A week after the expiry of deadline that the lenders had set to Kingfisher management to come up with a revival plan, including a $1 billion capital infusion, State Bank of India has said the banks are trying everything to find an amicable solution

Mumbai: State Bank of India (SBI), the lead banker in the 17-lenders consortium that extended Rs7,000 crore loans to the now grounded Kingfisher Airlines, on Wednesday said the banks are "trying to do everything to find an amicable solution" to the carrier's financial troubles, reports PTI.


The SBI comment comes a week after the expiry of deadline that the lenders had set to the airline management to come up with a revival plan that includes a $1 billion capital infusion.


Kingfisher is a good company with a high brand value and lenders are trying to do everything to see that an amicable solution is found, SBI Managing Director and Chief Financial Officer Diwakar Gupta told reporters on the sidelines of a PwC event.


After the regulator DGCA suspended the airline's flying licence on 19th October, SBI Chairman Pratip Chaudhuri had set a 30th November deadline to the airline management to infuse at least $1 billion in fresh capital as part of the revival exercise for the banks to consider lending afresh or recasting the existing loans.


SBI has an exposure of Rs1,500 crore to the Bangalore based airline, which has not been serviced since January this year.


Launched in May 2005, the airline has not reported a single penny in profit and has bank debt over Rs7,000 crore and unpaid interest thereon since January, apart from over Rs1,000 crore in vendor and tax arrears.


It also has accumulated losses of nearly Rs10,000 crore, apart from the salary dues of the past seven months.


Labour unrest towards the end of September led to the airline suspending operations from 1st October  and on 19th of the same month, the regulator DGCA had suspended its flying licence.


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