A strong move may have started. But wait for intraday corrections to buy. If the Nifty closes above 5,020 tomorrow we may see the index reaching 5,200
Hopes of a rate cut by the Reserve Bank of India (RBI) in its policy meeting later this month and strong global cues helped the market close higher for the third day in a row. Yesterday we had mentioned that if the market closes above the day's high, we may see a short rally. Today, the Nifty's intraday high of 5,010 was its best in the last six days (including today), but the index closed slightly below that level. Also, the benchmark recorded its highest percentage gain of 2.75% since 3 January 2012. If the Nifty manages to close above 5,020 tomorrow, we may see the index reaching the level of 5,200. The volume of 68.48 crore shares on the National Stock Exchange (NSE) was higher than its 10-day moving average.
The Indian market opened on a firm note on positive cues from across the world. Markets in the US closed higher on better-than-expected ISM data, which showed that the index for non-manufacturing business rose to 53.7 in May from 53.5 in the previous month. Reflecting the US sentiment, the Asian pack, with the exception of the Chinese benchmark, was up in morning trade. Asian markets were also supported by comments from the G7 leaders who agreed to synchronise their actions to the European debt crisis.
The Nifty opened 24 points higher at 4,887 and the Sensex added 79 points to its previous close to resume trade at 16,100. The opening figures on both the benchmarks were also their intraday lows.
Across-the-board buying led by banking, fast moving consumer goods and technology stocks helped the market move to a higher trajectory. Speculations that the Reserve Bank of India (RBI) would look at a rate cut on the back of easing of global crude prices also supported the gains.
Meanwhile, the rupee appreciated by 11 paise to 55.53 against the dollar in early trade, supported by a higher opening on the stock market amid selling of the greenback by exporters. The rupee had closed flat at 55.64 on Tuesday.
The benchmarks extended their gains in the noon session as the key European indices were in the green. The market hit its intraday high at around 3.00pm with the Nifty touching 5,010 and the Sensex climbing to 16,495.
The market pared a small portion of its gains and closed off the day's high. The Nifty added 134 points (2.75%) to settle at 4,997 and the Sensex jumped 434 points (2.71%) to finish at 16,454.
The advance-decline ratio on the NSE was in favour of the gainers at 1308:384.
Among the broader markets, the BSE Mid-cap index climbed 1.78% and the BSE Small-cap index advanced 1.78%.
Today's rally saw all sectoral gauges closing higher. BSE Auto (up 3.86%); BSE Capital Goods (up 3.63%); BSE Power (up 3.49%); BSE Bankex (up 3.01%) and BSE Fast Moving Consumer Goods (up 2.95%) were the top gainers.
Tata Motors (up 5.71%); Larsen & Toubro (up 4.77%); Jindal Steel (up 4.63%); Hero MotoCorp (up 4.29%) and Sterlite Industries (up 4.06%) led the Sensex today. There were no losers on the index.
The top gainers on the Nifty were Tata Motors (up 5.41%); Hero MotoCorp (up 5.08%); Jindal Steel (up 4.87%); Reliance Infrastructure (up 4.62%) and Ambuja Cements (up 4.59%). Cipla (down 0.34%); BPCL (down 0.26%) and Dr Reddy's Laboratories (down 0.21%) were the losers on the index.
Markets in Asia, with the exception of the Shanghai Composite, closed higher on global optimism. Better-than-expected services data from the US and assertion by G7 leaders on Tuesday that they would coordinate efforts to help countries like Spain and Greece ease their liquidity problems.
The Hang Seng climbed 1.43%: the Jakarta Composite jumped 3.32%: the KLSE Composite rose 0.58%; the Nikkei 225 surged 1.81%; the Straits Times advanced 1.79%; the KOSPI Composite gained 1.05% and the Taiwan Weighted closed 0.80% higher. Bucking the trend, the Shanghai Composite lost 0.10%.
At the time of writing, the key European indices were trading with gains of 1.38% to 2.03% and the US stock futures were in the green.
Back home, foreign institutional investors were net sellers of stocks totalling Rs680.86 crore on Tuesday while domestic institutional investors were net buyers of shares amounting to Rs794.65 crore.
Alstom T&D India today said it has bagged a contract worth Rs41 crore from Power Grid Corporation for setting up transmission network at Daltonganj in Jharkhand. The contract envisages supply, erection and commissioning of the substation. Alstom T&D surged 2.32% to close at Rs171.90 on the NSE.
Pharma major Dr Reddy's Laboratories has entered into a pact with Merck Serono, a division of Germany-based Merck KGaA, to co-develop biosimilar compounds. The tie-up will focus mainly on monoclonal antibodies in the oncology segment. The deal will also cover manufacturing and commercialisation of the compounds. The stock settled at Rs1,615 on the NSE, down 0.21% from its previous close.
Credit rating agency, CARE has assigned 'BBB' rating to Reliance Mediaworks' Rs45 crore Non-Convertible Debentures (NCD) programme, the rating agency has reaffirmed 'AAA(SO)' rating to the company's NCD programme worth Rs350 crore. The stock closed at Rs53 on the NSE, up 3.82% over its previous close.
The Planning Commission justified Rs35 lakh spend saying it as ‘routine maintenance and upgradation’. However, it has no answer on money spent for the non-feasible door access control system for toilets
After media reports surfaced on how the Right to Information (RTI) application revealed that over Rs35 lakh was spent on renovating two toilets, including the cost on installation of installation of Door Access Control System at Yojana Bhawan, the Planning Commission clarified that it is “routine maintenance and upgradation”, and said that it was found that access-control system was actually not feasible in practice. The RTI applicant has demanded explanation if this amounted to wastage of Rs5 lakh spent to install the system.
Subhash Agrawal, the RTI applicant, told Moneylife, “The clarification is an afterthought, seeing the media reaction on how money was blown up. While the RTI reply itself indicated that such system is not feasible, the Planning Commission’s reply backed it.”
In a statement the Planning Commission said, “These toilet blocks are meant for shared use and are all being renovated to the same standard. Because there have been instances of pilferages of newly constructed toilets, an access-control system was initially tried, but was not found feasible in practice. Yojana Bhawan is an important public building and must have the essential facilities. The costing and execution of works is not done by the Planning Commission, but by the CPWD (Central Public Works Department) which is the authorized government agency to do the same. The entire work is being done within the budgetary allocation and following the prescribed procedure.”
In a reply to a RTI application by Mr Agrawal, the Planning Commission revealed, “Cost of installation of Door Access Control System is Rs5,19,426 for two toilets. Cost of renovation of two toilets where door access control system is installed is Rs30,00,305.”
A communiqué from Planning Commission clarified that, “It is unfortunate that what is routine maintenance and upgradation is being projected as wasteful expenditure. The toilets being repaired or renovated are public toilet blocks, and not private toilets for senior officials or members. While the amount of Rs30 lakh being mentioned is correct, an impression is being created that this has been spent on two toilets. This is totally false, because these toilet blocks have multiple seats in addition to separate facility for the differently-abled. Each of these blocks can be simultaneously used by approximately ten people.”
However, information furnished under RTI revealed that CPWD has provided 60 smart cards for accessing these toilets to users including senior advisors, advisors, directors, personal secretaries, etc, making it clear that it was for private use.
The Planning Commission also said that more than 1,500 meetings are held every year and thousands of people use these public conveniences. A common complaint over the years was the poor quality of the toilets in the building—a complaint made not just by the ministers and foreign dignitaries who visit, but also by the staff and the journalists. “Does this mean that if I go to Yojana Bhawan, I have to find one of the 60 smart card users before accessing the toilet? Now they are saying the system is not feasible. But they have to answer whether the system is still in place or not in use and also what happened to those smart cards. Also, does this mean that Rs5 lakh is wasted?” asks Mr Agrawal.
Experts point out that it is still unclear who is responsible for the expenditure for the renovation on the toilets.
The renovation of the two toilets with “diplomatic embassy standards” and Japanese or German class fittings, should cost between Rs2 and Rs4 lakh in Delhi
The toilet controversies appears to be rocking the headlines in the print media and breaking news on television, and no less than the deputy chairman of the Planning Commission had to issue clarifications and press notes on the subject.
But one simple fact appears to have gone past unchallenged. Was the cost within rational levels, and if so, how much is our CPWD (Central Public Works Department), tasked with this job, spending on refurbishing toilets?
Based on quick television video grabs and media photos, I went on a walkabout in one of South Delhi's major “sanitary goods” market and the showroom of one of Indian’s most famous sanitary goods and bathroom boutiques. All are within two kilometres of where I live, and I have known some of the shopkeepers for about 30-40 years.
1) An estimate of renewing the bathrooms, including civil works, to what they refer as “diplomatic embassy standards”, was placed at between Rs2 and Rs4 lakh. This includes Japanese or German fittings, where required, or Indian equivalent. This is, as they say, for work done “with receipt”, which means they satisfy all mandatory and statutory requirements—except bribes. It is a considered opinion that the bribes involved through a chain of contractors and subcontractors would have been between 300% and 400% People smile at even higher numbers charged during the Commonwealth Games, and say, so what, nothing will happen.
2) A decent smart card reader configuration for 3-5 doors would cost between Rs30,000-Rs80,000, depending on configurations, and that would include 100 smart cards. And as we are all aware, a replacement smart card even for the Delhi Metro has a cash value of Rs50, while the actual cost when bought in bulk is in single digit Indian rupees.
Whether a building is 50 years old or almost new, rejuvenating a toilet which does not even have a shower cubicle from all appearances cannot cost so much money.
The bigger question to the Planning Commission, then, is this—would they like to use this as an opportunity to analyse how much a toilet should cost, whether it is for the exalted asses or ordinary human beings?
At Rs35 lakh, another friend who is senior enough in the hotel industry, could not help but say that it sounds like toilet humour —except that, it is we, the tax payers, who are paying for this joke.
(Veeresh Malik had a long career in the Merchant Navy, which he left in 1983. He has qualifications in ship-broking and chartering, loves to travel, and has been in print and electronic media for over two decades. After starting and selling a couple of companies, is now back to his first love-writing.)