Economic worries pull down share prices: Thursday Closing Report

Nifty may see a small pullback, but signs of a much deeper fall surface

A positive closing on the US market on Wednesday helped the indices open higher today. However, fresh inflation data dented the gains in the first half of trading and a drop in European shares on weak economic data pulled down the indices further in late trade.

The Nifty opened seven points higher at 5,412 and the Sensex started the day at 17,984, up 43 points over its previous close. PSU, banking, realty and metal stocks were in demand in early trade. The indices rose to the day’s high in the first hour, with the Nifty touching 5,435 and the Sensex at 18,033.

However, the market soon slipped into negative terrain, then stayed range-bound, hovering on both sides of the neutral line till around noon. The steep rise in weekly food inflation data to 8.04% for the week to 23rd July from 7.33% in the previous week, pushed the market into the red, and all sectoral indices traded lower.

The indices fell to their intra-day lows in late trade, as key European markets pared initial gains and slipped into the red. At the day’s low, the Nifty was down to 5,323 and the Sensex touched 17,665. The market settled a tad above these levels, with significant losses for a third day in a row. The Nifty closed at 5,332, down 73 points, and the Sensex declined 247 points to 17,693.

The advance-decline ratio on the National Stock Exchange (NSE) was 575:1127.

Among the broader indices, the BSE Mid-cap index declined 0.76% and the BSE Small-cap index was down 0.57%.

There were no green ticks in the sectoral space today. BSE Realty (down 2.16%), BSE Auto (down 2.06%), BSE Fast Moving Consumer Goods (down 1.82%), BSE Metal (down 1.76%) and BSE Power (down 1.61%) were the top losers.

Reliance Infrastructure (up 0.95%) and Reliance Communications (up 0.66%) were the only two gainers in the Sensex. The top losers were Mahindra & Mahindra (down 4.45%), ITC (down 3.17%), NTPC (down 2.48%), Hindalco Industries (down 2.47%) and Bajaj Auto (down 2.46%).

The top gainer on the Nifty was BPCL (up 3.49%), and GAIL (up 0.85%), RCom (up 0.61%) and Reliance Infra (up 0.27%) also gained. The major losers on the benchmark were Ranbaxy (down 4.13%), Reliance Capital (down 4%), M&M (down 3.96%), ITC (down 3.38%) and Sun Pharma (down 3.23%).

Markets in Asia pared morning gains and settled mostly lower on worries that the weak economic outlook in the US could hurt export-driven economies in the region and derail global growth. The Japanese market, however, was an exception, as it edged higher following government intervention in the currency market to hold the strengthening yen.

The Hang Seng declined 0.49%, the Jakarta Composite fell 0.35%, the Straits Times skidded 0.75%, the Seoul Composite tumbled 2.31% and the Taiwan Weighted tanked 1.65%. On the other hand, the Shanghai Composite rose 0.21%, the KLSE Composite added 0.12% and the Nikkei 225 gained 0.23%.

Back home, foreign institutional investors were net sellers of stocks worth Rs869.69 crore on Wednesday, but domestic institutional investors were net buyers of equities worth Rs422.48 crore.

Lanco Infratech plans to invest over Rs13,000 crore for a 2,000-MW power plant and developing a coal block, which it has won through bidding from Maha Tamil Collieries, at Raigarh in Chhattisgarh. Of this, Rs12,000 crore will go towards the power project and Rs1,000 crore for development of the mine. The project would take around four years to go on stream. Lanco Infratech declined 2.96% to close at Rs18.05 on the NSE.

Cummins India’s net profit for the quarter ended 30 June 2011 jumped 26.34% to Rs177.17 crore compared to Rs140.23 crore in the corresponding quarter last year. Total income grew by 13.18% to Rs1061.16 crore for the quarter under review from Rs937.59 crore in the year-ago period. The stock rose 0.29% at Rs612 on the NSE.

FMCG major Jyothy Laboratories (JLL) today said it had acquired an additional 1.76% stake in Henkel India, increasing its total shareholding in the company to over 71.6%.The price paid for the acquisition was lower than the average price of Rs40.68 per share that the company paid other shareholders in its recently concluded open offer. The scrip closed at Rs232.05, down 1.80%.


SEBI settles case against Guiness Securities for Rs15 lakh

The case relates to incidences of Guiness Securities' involvement in allegedly charging higher rates from clients towards purchase and sale of shares, dealing with unregistered sub-brokers, mis-utilising clients' funds and failure to redress investors' complaints within a reasonable time, among others

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) on Wednesday settled charges of violation of rules against Guiness Securities on payment of Rs15 lakh by the company, reports PTI.

"The noticee (Guiness Securities) has remitted a sum of Rs15 lakh ... this consent order disposes of the said proceedings," SEBI said while passing the consent order.

The case relates to incidences of Guiness Securities' involvement in allegedly charging higher rates from clients towards purchase and sale of shares, dealing with unregistered sub-brokers, mis-utilising clients' funds and failure to redress investors' complaints within a reasonable time, among others.

In a consent order, the company or person pays the settlement fee without denying or admitting the guilt.

SEBI had in 2009 appointed an adjudication order to look into the alleged violations.

Even as the proceedings were in progress Guiness Securities had in January 2010 made an application for settlement of proceedings through a consent order without admitting or denying the guilt.


Damodaran Committee: Bank boards must ensure customer satisfaction

RBI panel on customer services says board must discuss top complaints and monitor implementation of policy for customer care 

The Damodaran Committee on bank customer services has recommended active involvement of the boards of banks to guarantee customer satisfaction. "Commitment to hassle-free service for customers under the oversight of the bank's board is necessary to ensure maximum customer satisfaction. Customer centricity should be the purpose of the existence of the bank," the committee set up by the Reserve Bank of India has said in its report which was published on Wednesday.

The committee has said that "customer service and grievance redressal should be included as a mandatory parameter in the performance appraisal report of all employees."

Explaining the role of the board of directors in implementing customer service guidelines, the committee said, "The root cause analysis of the top five types of complaints in a quarter should be placed before the Customer Service Committee of the Board held in the subsequent quarter. A brief note on the discussions held on the same should be placed before the Board in its subsequent meeting. The actionable points that emanate out of such deliberations should be closed only after placing the compliance status in the subsequent meetings of the Customer Service Committee or Board (as the case may be)."

The report suggested that an agenda on the level of implementation of the Bank's Code of Commitments to Customers and an overview on the grievance redressal mechanism in the bank should be placed before the bank every quarter before the Customer Service Committee.

The committee said that every board should ensure they have comprehensive policies for customer acceptance, care and severance. "The bank policies should clearly lay out its approach to customer care, taking into account the geographic spread of its branches, segments of customers, needs of special sections like senior citizens, widows, physically challenged persons, etc," the committee said in its report.

Such a policy, the committee said, "must also clearly define and distinguish the features for different products and services and must indicate the target customer group. It should show sensitivity for small customers by ensuring that the pricing (bank charges) does not act as a deterrent for the small person to do banking transactions."

Emphasising on 'customer centricity', the committee recommended that bank boards should evolve human resources policies which will "recruit for attitude and train for skills." It pointed out that policy "should be framed to ensure that the prescribed response time for every type of grievance should be approved by an official not below the rank of the top management of the bank."

The report also suggested that "Branch  Level Customer Committee meetings may be  replaced with a meeting of customers of all banks of that area (say district-wise, block-wise) and be held in the presence of representatives of banks at periodic intervals (monthly/quarterly). The responsibility of organising such meetings may be entrusted to eminent consumer organisations in the region and expenses of such meetings can be shared by the bankers of that jurisdiction. The proceedings of the meetings should be recorded (CCTV) for the purpose of review of the same in higher fora."



Aurobindo Banerjee

5 years ago

Bank boards are not even scantly bothered about mundane things like customer care unless the customers happen to be big corporates whose interests alone they seek to protect. For the ordinary customers, as was mentioned in two recent comments on a similar topic by Bidup and C Jyothi, there is nothing but harassment at every step and even financial ruin in case the customer happens to be a small-time borrower for, say, house construction. Otherwise, as Bidup said, how can a big PSU bank even think of releasing loan installments to a contractor engaged by the borrower (as in the instance quoted by Bidup) while the said contractor is a total outsider and not a party to the loan agreement/contract? Customer Care or satisfaction, etc., in India are just publicity stunts. Banks' concerns are for the big business of which they want to be partners-in-orosperity, not so for the huge number of savings bank customers, HBA borrowers, student loan seekers, etc.

K B Patil

5 years ago

As an account holder in nationalised and private banks, I would urge private banks to shed their attitude to account holders as milch cows, charging for everything. The most important step would be to make it mandatory for all banks to issue passbooks to SB account holders.

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