Dip ahead: Wednesday Closing Report

Nifty may give back some of the gains tomorrow

The market was range-bound for the entire trading session as nervousness ahead of the earnings season made investors jittery. We may see the Nifty making a struggled upmove to the level of 4,910 after which it may reach the level of 4,950. However, the benchmark should maintain itself above 4,842, today’s low to sustain the gains. Today’s marginal gain was on a large volume of 79.60 crore shares on the National Stock Exchange (NSE). Huge volume without advance is a sign of tiredness, even if temporary.

The market opened higher on continuing optimism on the domestic front. Global ratings agency Moody’s yesterday upgraded its rating of the country's short-term foreign currency bank deposits to investment grade and the government notified 100% foreign direct investment (FDI) in single-brand retail. The uptick in the Asian bourses in morning trade also supported gains in the domestic market. The Nifty opened at 4,863, up 13 points over its previous close and the Sensex added 57 points to resume trade at 16,222. Consumer durables, banking, auto and metals sectors supported initial gains.

Profit-booking in realty, metal, IT and capital goods stocks, ahead of the quarterly earnings season, which officially kicks off on Thursday with IT bellwether Infosys announcing its numbers in the morning led the market lower. The benchmarks were range-bound in subsequent trade.

Lacklustre opening of the European markets added to the sluggishness in the indices in the second half of trade. However, the broader indices outperformed the benchmarks as the FDI notification in singe-brand retail was welcomed by retail stocks.

The Nifty traded in the range of 35 points (4,842-4,877) and the Sensex swung between 16,128 and 16,245 (117 points) during trade today. At the close, the Nifty and the Sensex rose 11 points each to settle at 4,861 and 16,176, respectively.

The advance-decline ratio on the NSE was 1266:576.

The broader indices outperformed the Sensex today, as the BSE Mid-cap index climbed 1% and the BSE Small-cap index surged 1.32%.

BSE Realty (up 4.64%); BSE Metal (up 2.26%); BSE Bankex (up 1.12%); BSE Oil & gas (up 1.02%) and Capital Goods (up 0.74%) were the top gainers in the sectoral space. The laggards were BSE IT (down 1.42%); BSE TECk (down 1.21%) and BSE Fast Moving Consumer Goods (down 0.68%).

The top Sensex gainers were Hindalco Industries (up 5.69%); Sterlite Industries (up 4.85%); DLF (up 3.41%); Tata Steel (up 2.88%) and Hero MotoCorp (up 1.97%). The losers were led by TCS (down 2.54%); Jindal Steel (down 2.16%); Mahindra & Mahindra (down 1.60%); Bharti Airtel (down 1.54%) and Cipla (down 1.53%).

The key advancing stocks on the Nifty were Hindalco Ind (up 5.85%); Sesa Goa (up 5.64%); Axis Bank (up 5.45%); BPCL (up 5.24%) and Sterlite Ind (up 4.90%). Grasim (down 2.63%); TCS (down 2.56%); Jindal Steel (down 2.49%); Power Grid Corporation (up 2.39%) and M&M (down 1.72%) settled at the bottom of the index.

Markets in Asia closed mostly in the green on positive economic news from the US. However, European concerns ahead of Spanish and Italian bond auctions later this week capped the gains. Stocks in China fell a day ahead of the release of inflation data for December.

The Hang Seng gained 0.78%; the KLSE Composite added 0.02%; the Nikkei 225 rose 0.26%; the Straits Times climbed 1%; and the Taiwan Weighted closed 0.13% higher. Among the losers, the Shanghai Composite fell 0.42%; the Jakarta Composite declined 0.74% and the Seoul Composite dropped 0.41%. At the time of writing, the main European markets were mixed and the US stocks futures were trading in the positive.

Back home, foreign institutional investors were net buyers of stocks totalling Rs324.32 crore on Tuesday while domestic institutional investors were net sellers of equities amounting to Rs115.11 crore.

Escorts, a maker of critical railway components, has inked a licencing and technology pact with a US-based Honeywell for technical assistance on railway brake systems. The technical tie-up will help the Indian major offer brake blocks and disc brake pads suited for high-speed trains in India as well as select export markets. The stock jumped 4.04% to close at Rs73.40 on the NSE.

Sasken Communication Technologies, a leading embedded communications solutions company is working towards expanding its scope of work into newer industries such as automotive, retail, security and healthcare. The stock rose 1.95% to close at Rs107 on the NSE.

In a fresh trouble for Lavasa Corporation, part of Hindustan Construction Company (HCC), two members of tribal community from Mulshi tehsil of Pune have approached the Bombay High Court, challenging the notification which empowered the Corporation to acquire land and act as a Special Planning Authority. Despite the setback, HCC jumped 5.05% to close at Rs19.75 on NSE.

RPG Life Sciences informed the BSE that the ministry of social and family affairs, health and consumer protection, Hamburg, Germany did not grant EU GMP for the company’s API facility at Navi Mumbai, Maharashtra, post their inspection citing certain deficiencies. The company said that this move will have adverse impact on its export business. The stock fell 0.44% to close at Rs68.60 on the NSE.


CBI files charge-sheet against former ITAT member

The agency alleged that Jugal Kishore, a former ITAT member, demanded bribe of Rs30 lakh from the accounting firm for the undue favours extended to them in Income Tax matters of various parties before the tribunal

New Delhi: The Central Bureau of Investigation (CBI) has filed a charge-sheet before a Kolkata special court against a former member of Income Tax Appellate Tribunal (ITAT) for allegedly colluding with the owners of an accounting firm to deliver favourable orders to its client in lieu of illegal gratification, reports PTI.

The agency filed its charge-sheet against the then ITAT accountant member Jugal Kishore and five other persons including the owner of accounting firm SK Tulsiyan & Company SK Tulsiyan, Shashi Tulsiyan, Ravi Tulsiyan besides middle men Subhash Chand Barjatiya and Nishant Jain.

The agency alleged that Mr Kishore demanded bribe of Rs30 lakh from the accounting firm for the undue favours extended to them in Income Tax (I-T) matters of various parties before the tribunal.

“The Tulsiyans were acting as a tout to Jugal Kishore and were the middlemen and prepared orders on behalf of the members of ITAT, Kolkata and manipulated orders,” a CBI spokesperson said here today.

The agency had registered the case against Mr Kishore and five others on 13 May 2008. Mr Kishore was allegedly caught red-handed while accepting the bribe during a trap laid down by the agency.

“Nishant Jain and Subhas Chand Barjatiya, who had come out from the residential premises of Jugal Kishore after handing over the bribe amount to Mr Kishore on behalf of the Tulsiyans, were apprehended by a team of CBI officials during the trap laid down by the agency,” the official said.

The CBI which was awaiting sanction of prosecution against Mr Kishore received it on 5th January and filed the charge-sheet yesterday.

The spokesperson said during the searches conducted at Mr Kishore's residence Rs28 lakh of alleged bribe money was recovered while the remaining Rs2 lakh was found in a brief case with Mr Jain and Mr Barjatiya.

“Subsequently during investigation Ravi Tulsiyan, Sajjan Kumar Tulsiyan and Shashi Tulsiyan were also arrested in this case for their active participation in the commission of the offence,” the spokesperson said.

Later during the searches at the offices of the accounting firm, CBI claimed that it had recovered nearly 14 computer discs carrying over 70 pre-dated judgements which were delivered in various benches of the tribunal, sources said.


Govt to infuse Rs6,000 crore in SBI via preference issue, says bank’s chairman

For the past three months, the SBI brass has been pegging the capital infusion size at around Rs6,000 crore. Last month, CFO Diwakar Gupta said an infusion may happen ‘any time’, while chairman Pratip Chaudhuri last week said he has received a letter from the finance ministry on recapitalisation

Mumbai: The government has agreed to infuse fresh capital into State Bank of India (SBI) through a preferential issue and the country’s largest lender will get up to Rs6,000 crore before the fiscal-end, reports PTI quoting chairman Pratip Chaudhuri.

“We will be having a preferential issue and will be getting capital through it,” Mr Chaudhuri told PTI when asked about the progress on its proposed recapitalisation.

When asked what could be the quantum of the infusion, he said, “The size will be Rs5,000 to Rs6,000 crore.”

He did not give any specific indication about the timing of the issue, though he said it will happen before 31st March.

SBI’s total capital adequacy ratio (CAR) stood at 11.4% as of the September quarter, of which core Tier-I capital stood at 7.7%, below the 8% level desired by the government.

It had first announced its intention to raise up to Rs20,000 crore through a rights issue over a year ago, but the government, which holds a 59.4% stake in the lender, has delayed the proposal as it will have to subscribe to almost two-thirds of the money.

For the past three months, the SBI brass has been realistically pegging the capital infusion size at around Rs6,000 crore. Last month, chief financial officer Diwakar Gupta said an infusion may happen ‘any time’, while Mr Chaudhuri last week said he has received a letter from the finance ministry on recapitalisation.

The recapitalisation will take the bank’s Tier-I capital ratio to over 9%, he had said.

A slew of lenders, including Bank of Baroda, Bank of Maharashtra and Union Bank have made similar announcements in the recent past. Bank of Baroda would be getting Rs775 crore this fiscal while Bank of Maharashtra is ready for an Rs860 crore preferential issue.

“As part of increasing its stake to the mandated 58%, the government has agreed to pump in Rs775 crore into the bank. The fund infusion will happen before the end of the fiscal,” Bank of Baroda chairman and managing director Mallya told PTI last month end, adding this would be done by way of a preferential issue.

In March last year, the government pumped Rs2,675 crore into BoB, increasing its stake to 57.3% from 53% earlier. With the infusion of Rs775 crore, government ownership in the bank will touch the mandatory 58% level, Mr Mallya added.

Union Bank also said it would be recapitalised by the government this fiscal. UBI said it would receive a capital infusion of Rs280 crore from the government.

Last week, a finance ministry official said the government would be pumping Rs17,000 crore into various state-run banks this fiscal. This makes the additional requirement Rs11,000 crore, which the official said would be met through a supplementary demand.

The FY11-12 Budget had earmarked only Rs6,000 crore for recapitalisation of state-run banks in the current fiscal.

The other banks that are likely to get a fresh capital infusion are IDBI Bank and Syndicate Bank, among others.

In 2010-11, the government had provided capital support worth Rs20,157 crore to various public sector banks.

A committee headed by finance secretary RS Gujral is working out a strategy for capitalisation of public sector banks over a period of next 10 years to meet Basel III requirements, under which the 26 state-run lenders would need Rs3.6 lakh crore in fresh capital.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)