As mentioned earlier, the market is making a laboured attempt to rally
The market was volatile with trading being range bound. The Sensex ended at 16,657, higher by 41 points (0.2%) and the Nifty ended at 5,000, higher by 13 points (0.2%). The benchmarks were up in the early trading session. The market touched its intraday high of 16,817 in the early afternoon session. However, it slid from there sharply but bounced back from the red to end in the positive zone.
The Shanghai Composite was up 2.78%, the most in two weeks, on reports of a rise in exports and higher-than-expected new loans in May. Key benchmarks in Singapore and Hong Kong were up 0.34% to 0.84%. Among other Asian markets, major indices in Indonesia, Japan, South Korea and Taiwan were down by 0.03% to 1.12%.
US markets were up in volatile trading on Tuesday (8th June), supported by materials and financial stocks; however, trading was subdued in big-cap technology shares on concerns over their European exposure. The Dow was up 123 points (1.2%) to 9,940. The S&P 500 was up 11.5 points (1.1%) to 1,062. The Nasdaq dropped 3.3 points (0.15%) to 2,170.5.
The International Monetary Fund (IMF) said that the euro crisis could affect global trade dampening the demand for Asian exports and sending "hot money" into the region if policymakers fail to act swiftly and appropriately. The strong growth prospects in Asia were also likely to bring capital inflows into the region leading to an asset bubble.
Chinese exports in May grew about 50% from a year earlier. Consumer prices in May rose 3.1% from a year earlier, accelerating from 2.8% in April.
Back home, the government has a cash balance of Rs480 billion with the Reserve Bank of India (RBI) and will spend it gradually rather than in one go. It will expand liquidity support as banks are likely to need more cash ahead of the payment of advance tax and payment towards the broadband wireless access (BWA) spectrum fees.
The finance minister said that the target of direct tax receipts for the financial year 2010-11 is expected to exceed the target of Rs4.30 lakh crore.
Foreign institutional investors were net sellers on Tuesday of Rs242 crore. Domestic institutional investors bought stocks worth Rs41 crore.
The board of Interface Financial Services (up 9%) has decided to increase the authorised share capital from the existing Rs6 crore to Rs76 crore by issuing 70,00,00,000 equity shares of Re1 each. It also approved raising funds to the tune of Rs20 crore by offering, issuing and allotting convertible warrants on a preferential basis and Rs50 crore by way of QIP/FCCB/GDR/ADR. The company has also decided to disinvest shares from its wholly-owned subsidiary companies-Interface Housing Finance Ltd and Interface Network Marketing Pvt Ltd.
California Software Company (Calsoft) (down 0.3%) has announced that its business unit Calsoft Enterprise Solutions Ltd will henceforth be known as Inatech.
Aurionpro Solutions Ltd (down 0.6%), through its wholly-owned subsidiary E2E Infotech Ltd, has entered into a global partnership agreement with CameronTec, the financial industry's leading provider of FIX infrastructure and connectivity solutions.
Spice Mobiles (down 0.2%) said that the name of the company has been changed from 'Spice Mobiles' to 'Spice Mobility' with effect from 7 June 2010. Further, the company has received the Certificate of Incorporation issued by the Registrar of Companies, Uttar Pradesh and Uttaranchal.
Wipro (down 2%) will merge Yardley Consumer Care with itself. Wipro Yardley Consumer Care was formed after Wipro Consumer Care, which sells products like the 'Santoor' brand of soaps, acquired personal care brand Yardley from the UK-based Lornamead Group for about Rs214 crore last November.
For the first time in many months, equity mutual funds have recorded net inflows
After months of recording outflows, equity funds recorded net inflows to the tune of Rs1,256 crore in May 2010. In April 2010, equity redemption had reached
In May 2010, income funds recorded outflows of Rs35,084 crore while balanced funds saw inflows of Rs206 crore. The net redemption under all category of funds stood at Rs62,960 crore.
According to AMFI data, the assets under management (AUM) of equity schemes stood at Rs1.71 lakh crore as on May 2010.
The last time equity funds recorded inflows was in January thanks to a new fund offer (NFO) from Axis Bank. January saw inflows of Rs980 crore into equity schemes.
Equity MFs have been bleeding over the last six months. Equity schemes saw redemptions of Rs1,133 crore in April 2010 compared to Rs196 crore for the corresponding period last year, while AUM of equity schemes were up 63% at Rs1,76,830 crore in April compared to Rs1,08,507 crore in the corresponding period last year.
Last month, debt funds or fixed-income schemes recorded inflows to the tune of
Rs1,77,773 crore. In March 2010, debt funds saw Rs1,64,487 crore in redemptions.
Equity funds have witnessed continuous redemptions since August 2009 to the tune of Rs7,970 crore except in January and February 2010, which recorded inflows of Rs1,514 crore and Rs980 crore respectively.
The Maharashtra government had ruled in August 2006 that developers have no right to charge transfer charges on a flat till a cooperative society is formed. However, this notification is being openly flouted
The housing department of the Maharashtra government had passed an opinion in August 2006 stating that a developer has no right to recover transfer charges at the time of sale of a flat by the investor till a cooperative society is formed. But it is an open secret that most builders are blatantly violating the rule and are charging Rs1,000 (or more) per sq ft as transfer fees.
"The Maharashtra housing department has passed the notice long back but builders are not following it. The issue has remained in the industry since a long time but the official authorities are not taking action against such wrong deeds of the developers," said Vinod C Sampat, advocate and proprietor, Vinod C Sampat and Co.
He further added, "There is a lack of transparency, developers are collecting the transfer fee. This is a way of extortion."
Transfer fee is a one-time payment made to the residential cooperative society when there is a case of transfer of ownership. However, the society can be registered only when 60% of the flats are sold. A ceiling of Rs25,000 has been fixed by the registrar of cooperative societies as transfer fee while local developers have been charging as much as Rs1,000 per sq ft. This is an illegal act being carried out by builders.
Property prices are sky-high in Mumbai-on the top of that, developers are charging such a huge fee for transferring the ownership of the flat. Currently property prices in Worli (central Mumbai) range between Rs26,000 per sq ft to Rs37,000 per sq ft while in Lower Parel (central Mumbai) and Bandra (suburban Mumbai) they range between Rs18,000 per sq ft to Rs23,000 per sq ft.
"If builders charge a nominal fee of Rs25,000, it is fine because it involves an administrative cost, but to charge a certain sum per sq ft is not fair," said Pranay Vakil, chairman, Knight Frank (India) Pvt Ltd.