If the Nifty rallies higher, the next target would be 6,050
SEBI chief Sinha said credibility of primary markets is at stake as retail investors on many occasions are left clueless about their returns as scores of stocks are trading way below listing price
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) on Wednesday cautioned the credibility of primary markets is at stake as retail investors on many occasions are left clueless about their returns as scores of stocks are trading way below listing price, reports PTI.
It also said investment bankers need to introspect their role on the price discovery mechanism for these markets.
"The credibility of our markets is at stake. The i-bankers need to introspect whether their behaviour challenges the entire merit-based versus price discovery mechanism or not. We need some amount of sanity in pricing and IPO disclosures," SEBI Chairman UK Sinha told a summit of i-bankers here in west India.
Stating that many of the newly-listed stocks are trading below listing price, Sinha said: "There is something wrong if two-thirds of the issues between 2009 and 2012 are trading below market decline levels. Call auction data show that volatility on opening day have reduced considerably.
"SEBI has noticed in some IPOs that due diligence wasn't done properly. Assets mentioned were missing or weren't even mentioned," he said.
The market is trying to rise but the trend is still down
The market brushed the status quo maintained by the Reserve Bank of India on the interest rates and closed slightly off the day’s highs on across-the-board buying support. The market is trying to rise but the trend is still down. The benchmarks are doing their best to fight off the downtrend. The National Stock Exchange (NSE) recorded a volume of 85.40 crore shares and advance-decline ratio of 1003:730.
The market opened in the green tracking global cues and on hopes that the Reserve Bank of India (RBI), in its mid-quarter monetary policy review later in the morning, will ease rates in an attempt to spur growth. In the global arena, markets in Asia were trading firm on expectations that US policy makers would conclude a budget plan before fresh taxes come into effect early next year. Overnight US stocks settled near the day’s highs on hopes of an answer to the “fiscal cliff”.
The Nifty opened trade at 5,874, up 16 points and the Sensex started off 49 points higher at 19,293. Buying interest in auto, capital goods and consumer durables stocks helped the market remain in the positive, but were range-bound till the RBI policy announcement.
The central bank’s decision to keep key rates unchanged saw the market sliding into the red. The reversal led the benchmarks to their lows with the Nifty touching 5,823 and the Sensex retracting to 19,149.
However, the market bounced back from the lows on buying interest in metal, capital goods consumer durables and power sectors. An uptick in the key European markets in early trade also supported the sentiment in the domestic market.
The market continued to trade firm with the benchmarks hitting their high at around 2020pm. At the high the Nifty scaled 5,906 and the Sensex climbed to 19,396.
The indices closed off their highs with 12 of the 13 sectoral gauges in the green. The Nifty gained 39 points (0.66%) to 5,897 and the Sensex surged 120 points (0.63%) to finish trade at 19,365.
Among the broader indices, the BSE Mid-cap index gained 0.52% and the BSE Small-cap index advanced 0.59%.
The top sectoral gainers were BSE Realty (up 2.38%); BSE Metal (up 1.78%); BSE Capital Goods (up 1.50%); BSE TECk (up 1.14%) and BSE Power (up 1.08%). BSE Oil & Gas (down 0.21%) was the lone loser.
Twenty three of the 30 stocks on the Sensex closed in the positive. The chief gainers were Bharti Airtel (up 4.23%); BHEL (up 4.14%); Tata Steel (up 3.76%); Hindalco Industries (up 2.66%) and Sun Pharmaceutical Industries (up 2.33%). The chief losers were Maruti Suzuki (down 1.64%); ONGC (down 0.87%); Dr Reddy’s Laboratories (down 0.68%); Bajaj Auto (down 0.45%) and Reliance Industries (down 0.35%).
The top two A Group gainers on the BSE were—Unitech (up 5.75%) and Zee Entertainment Enterprises (up 5.47%).
The top two A Group losers on the BSE were—Jaiprakash Power Ventures (down 6.86%) and Hindustan Zinc (down 2.67%).
The top two B Group gainers on the BSE were—Polar Industries (up 19.95%) and Vertex Spinning (up 18.84%).
The top two B Group losers on the BSE were—Mahanivesh India (down 19.99%) and Comfort Intech (down 13.19%).
Out of the 50 stocks listed on the Nifty, 37 stocks settled in the positive. The major gainers were BHEL (up 4.39%); Bharti Airtel (up 4.36%); Tata Steel (up 4.12%); Hindalco Ind (down 2.62%) and Jaiprakash Associates (up 2.55%). The key losers were Maruti Suzuki (down 1.57%); Dr Reddy’s (down 0.97%); Ranbaxy Laboratories (down 0.81%); Bajaj Auto (down 0.60%) and RIL (down 0.59%).
The Asian pack settled mostly higher following a report that US president Barack Obama made compromises in negotiations for a budget deal. Investors are awaiting the outcome of the Bank of Japan’s policy meeting on Wednesday for fresh stimulus announcements.
The Shanghai Composite added 0.10%; the KLSE Composite gained 0.66%; the Nikkei 225 climbed 0.96%; the Seoul Composite advanced 0.51% and the Taiwan Weighted rose 0.16%. On the other hand, the Hang Seng fell 0.08%; the Jakarta Composite declined 0.33% and the Straits Times lost 0.06%.
At the time of writing, the key European indices were trading with gains between 0.07% and 0.54% and the US stock futures were in the positive.
Back home, foreign institutional investors were net buyers of shares totalling Rs886.68 crore on Monday while domestic institutional investors were net sellers of equities amounting to Rs690.32 crore.
Healthcare major Apollo Hospitals Enterprise today said it will invest Rs400 crore to set up 10 specialised hospitals in India by 2015 for treatment of heart diseases and cancer. Out of the total, five will be focused on treatment of heart diseases and the other five on cancer treatment. These will be in addition to the group's plans of adding 2,000 beds. The stock added 0.15% to settle at Rs812.80 on the NSE.
Industrial solutions provider Honeywell Automation India today said its promoter Honeywell Asia Pacific Inc has sold 6.24% stake in the company for an estimated Rs 130 crore. The stake sale was done to bring down promoters’ holding to 75%, in compliance with SEBI guidelines. Honeywell Automation tanked 6.75% to close at Rs2,590 on the NSE.
Pharma major Aurobindo Pharma today said it has received US health regulator’s final approval to market Abacavir Tablets, used in the treatment of Human Immunodeficiency Virus (HIV), in the American market. The annual sale of the product is approximately $88 million. The product has been approved out of Unit III formulations facility in Hyderabad, India, the company said. The stock gained 2.03% to close at Rs190.80 on the NSE.