Nifty will look weak below 5,500
The market traded in the positive for the entire session and settled in the green for the second day. Sentiments were boosted following comments from RBI deputy governor Subir Gokarn that the central bank may go in for another CRR cut on the back of tight liquidity.
As we had mentioned in our Friday’s closing report, the Nifty crossed the level of 5,600 today and settled a little above it at 5,607. The gains were on a lower volume of 111.78 crore shares on the National Stock Exchange.
Resuming trade after an extended weekend, the local market opened mixed on reports that Eurozone policymakers agreed to a second bailout package for Greece. The Nifty started the day at 5,562, two points down from its Friday’s close while the Sensex gained 15 points to open trade at 18,304.
The market touched its intraday day low in the early session itself. At the lows, the Nifty fell to 5,562 and the Sensex went back to 18,293. However, brushing aside the sluggishness the indices soon picked up momentum on continued buying support from institutional investors.
The benchmarks were range-bound till post-noon trade as most markets in Asia were trading lower. Realty, consumer durables and oil & gas stocks led the upmove which began from around 2.00pm onwards. The gains helped the benchmarks hit their day’s high in the last hour. At the highs, the Nifty touched 5,622 and the Sensex scaled 18,471.
However, while the market came off the highs, it closed in the green for the second day in a row. At the close, the Nifty gained 43 points to 5,607 and the Sensex surged 139 points to settle at 18,429.
The advance-decline ratio on the NSE was in favour of the gainers at 1128:731.
The broader indices outperformed the Sensex today, with the BSE Mid-cap index gaining 0.91% and the BSE Small-cap index climbing 1.20%.
With the exception of the BSE IT index (down 0.16%) all other sectoral gauges settled higher. They were led by BSE Realty (up 4.34%); BSE Consumer Durables (up 3.29%); BSE Oil & Gas (up 2.29%); BSE Power (up 0.97%) and BSE Capital Goods (up 0.87%).
The top five scrips on the Sensex were BHEL (up 4.78%); ONGC (up 3.70%); Hindalco Industries (up 2.95%); Reliance Industries (up 2.92%) and Bharti Airtel (up 2.79%). On the other hand, Sterlite Industries (down 3.46%); Tata Power (down 2.61%); Wipro (down 1.46%); Tata Motors (down 0.99%) and Hindustan Unilever (down 0.82%) settled on the bottom of the index.
BHEL (up 4.56%) led the gainers on the Nifty. It was followed by ONGC (up 4.43%); Reliance Infrastructure (up 3.76%); Bharti Airtel (up 2.89%) and Hindalco Ind (up 2.85%). The major losers on the index were Sterlite Ind (down 3.61%); Tata Power (down 2.99%); BPCL (down 1.66%); Wipro (down 1.41%) and NTPC (down 1.28%).
Markets in Asia, which began trade on a soft note despite the positive news from Europe, pared their losses and settled mostly higher. The gains came as investors welcomed China’s weekend move to reduce the reserve requirement ratio for banks, a move that would lead to additional lending by banks.
The Shanghai Composite gained 0.75%; the Hang Seng rose 0.25%; the Jakarta Composite advanced 0.57%; the KLSE Composite climbed 0.21% and the Straits Times settled 0.13% higher. On the other hand, the Nikkei 225 fell by 0.23%; the Seoul Composite shed 0.03% and the Taiwan Weighted lost 0.42%. At the time of writing, the key European indices were in the negative while US stock futures were trading higher.
Back home, foreign institutional investors were net buyers of shares totalling Rs536.49 crore on Friday. On the other hand, domestic institutional investors were net sellers of equities amounting to Rs223.07 crore.
State-run Rural Electrification Corporation (REC) has received the finance ministry’s approval to raise Rs3,000 crore through issue of tax-free bonds this fiscal. The tax-free bonds issue, which will open on 5th March, will offer an interest rate of not less than 50 basis points below the yields on Government Securities. The stock declined 3.08% to close at Rs241 on the NSE.
Pharma major Ranbaxy Laboratories today said its subsidiary Ranbaxy Australia Pty Ltd (RAPL) has launched generic Atorvastatin tablets, used for reducing cholesterol, in the Australian market. Atorvastatin is the most prescribed statin in Australia and according to IMS its current market size $680 million. Ranbaxy closed 0.07% higher at Rs448.90 on the NSE.
JSW Steel plans to raise up to $275 million through overseas borrowings mainly to buy back its outstanding foreign currency convertible bonds. The fund raising exercise of up to $275 million includes a green-shoe option of $75 million, the company said. The stock rose 0.95% to settle at Rs863.55 on the NSE.
While Jet Airways or Air India did not voluntarily cancel their flights en masse, Kingfisher seems to be doing it routinely. But what routes the hatred towards Kingfisher's brand ambassador, Dr Mallya himself?
With no wind beneath his wings, Dr Vijay Mallya is grounded. The more things worsen, the more menacing his critics look. Which makes us wonder, what is it about the "King of Good Times" that inspires this rage?
It is not that other airlines have not faced trouble. Even Jet Airways or Air India did not voluntarily cancel their flights en masse, which Kingfisher seems to be doing. This has angered the passengers. But what routes that hatred towards the brand ambassador, Dr Mallya himself?
Vijay Mallya took up the mantle of "the airline's host" on the behalf of the industry.
Kingfisher was projected as an airline which would provide first class service at low cost rate. So initially, food was served, television was available in-flight, and of course, there were the air hostesses. But after some years, as aviation turbine fuel (ATF) dues and debts started to pinch, all these services were withdrawn. The King of Good Times was losing his sheen.
"When you are in the public sphere, you can either keep a low profile or a high profile. And when you keep a high profile, be ready to face the flak" says V Shantakumar, a veteran adman and former CEO of Saatchi & Saatchi in India. "Mallya put his personal stamp all over it. People expected more from him and this brand that he personified. Now, they blame him and his lifestyle for the sorry state of affairs."
One might remember the Kingfisher Airline's promos, which used to be aired frequently half a decade ago, soon after its operations started. Dr Vijay Mallya appeared in a polished black suit and personally welcomed everyone to his airline. He then went on to say that he "personally selects" the staff; and that he has taught them "to show the passengers the same hospitality that they would be offered as if they are in my own home". You can watch the commercial here http://www.youtube.com/watch?v=rMvtLKJmCmM
Dr Mallya's role model was Virgin Group's self-made but larger-than-life head, Richard Branson-who acted as the brand ambassador for his own company. Dr Mallya wanted to be him, and wanted his company to become Virgin. Kingfisher attempted to shine across diverse circuits, like Virgin had done with panache. Kingfisher Airline's staff got a red uniform-remarkably similar to Virgin's; and Dr Mallya got himself a haircut like his idol. Mimicking Virgin's versatility, Kingfisher entered diverse ventures. Unfortunately, Kingfisher was ill-equipped to carry the burden of Virgin's signature flamboyance.
Dr Mallya's idea of "personal selection" worked out-ample number of flyers will vouch that Kingfisher Airline has the prettiest air hostesses. Then there are the Kingfisher calendar girls. A least of half of India's population would agree that Dr Mallya (and his son) has good taste and overwhelming good fortune.
But Kingfisher's noble proclamations on hospitality have now become the subject of many jokes. As flights continue to be grounded and reports flow in of actress Ayesha Takia's Twitter war against Kingfisher; whose ground staff allegedly tore off her sister's boarding pass, people now ask, is this the way Dr Mallya treats his guests at home?
Public perception is a complex phenomenon. Every company, organisation or brand finds a poster boy-and when it fails; his image takes the maximum beating. Our very own prime minister is a fitting example, who has come to symbolise inaction and corruption; despite many people thinking that personally, he is an honest man.
"It is not that other airlines are without troubles," said an advertising veteran, "Most airlines are making losses and they are yet to repay loans. The problem with Kingfisher is that Dr Mallya himself made it personal. And then there were repeated blunders-defiant comments about bank bailouts, continuous grounding of flights that angered passengers, and now Dr Mallya is blaming income tax department for his troubles. And amidst everything, Dr Mallya and Kingfisher continue to flaunt themselves. It is very easy for the issue to turn personal in such a situation-because as a subject; isn't a failed personality more dramatic than a failed organisation?"
Even when the airline ran into trouble, the in-your-face flamboyance continued-the IPL franchise, Formula1 team and other luxurious ventures. The reek of money displeased some, but things worsened because the spheres where Dr Mallya had started to get involved ran into controversies. And Mallya's junior's deriding of Ms Takia's complaint did not help matters.
The bubble burst in 2011. Moreover, with the nation still seething over rampant corruption and the tremendous loss the scams caused to the airlines, talks of banks bailing out a loss-making private enterprise; owned by a Rajya Sabha member; with public money sparked an outrage. Rahul Bajaj's famous comment made headlines. Dr Mallya however, put up a defiant face and argued how the bank bailout would not use public funds.
Dr Mallya and his beloved airline now have become a staple for Internet jokes. In Twitter, someone said, "Mallya was going to clear the air in New Delhi. But his flight got cancelled." The focus, even now, seems to be more on Dr Mallya than the workings of Kingfisher Airline.
It remains to be seen what awaits the troubled airline. Meanwhile, a Facebook user has a tip: "His drinks were with you when you were needed them. Now, drink more and support Vijay Mallya when he needs you."
The right-to-reject button alone will create plenty of pressure in entrenched political parties...