Nifty may move sideways with a positive bias. It has to close decisively above 5,170 for an upmove
All Asian markets opened on a positive note today, and most of them ended in the green on unconfirmed media reports that Europe’s key bailout fund will be expanded by close to $2.50 trillion. US markets also had closed in the positive yesterday, on reports of agreements to strengthen the beleaguered euro-zone’s rescue fund. However, a UK newspaper report indicated on Tuesday that Germany and France had “agreed to leverage the euro-zone’s bailout fund to over 2 trillion euro as part of a ‘comprehensive plan’,” but “a senior euro-zone source poured cold water on the report.”
Domestic indices Sensex and Nifty also opened upwards due to these (unconfirmed) reports. The Sensex was 135 points up at 16,883 and the Nifty was 43 points up at 5,080. Both the Sensex and the Nifty hit their intraday lows at the beginning of the morning session at 16,874 and 5,075 respectively. These indices hit their intraday highs at the close of the session at 17,107 and 5,148. Both benchmarks were able to make a higher high and higher low today. Today’s gain wiped out all the losses of the past two-day fall. Yesterday, we had said that prices might head lower, but domestic bourses looked up due to the reports of a probable EU debt-fix. At close of trade, the Sensex ended 337 points up (2.01% gain) at 17,085, while the Nifty made a 20-day (including today) high, closing at 5,139 (up 102 points) or 2.02 percent. The Nifty may move sideways from now on with a positive bias. But it has to close decisively above 5,170 for an upmove.
After yesterday’s warning to France that its triple-A rating could be at risk, Moody’s came out with yet another negative blow today—the ratings agency cut Spain's sovereign ratings by two notches, saying high levels of debt in the banking and corporate sectors leave the country “vulnerable to funding stresses”.
All the BSE sectoral indices ended in positive territory, the maximum gains being seen in BSE Realty (up 3%) followed by BSE Bankex (2.69%). The least to gain was BSE Consumer Durables (up 0.84%). All the Sensex 30 stocks ended in the green. The top five gainers were DLF (up 4.16%); Hero MotoCorp (up 4.13% due to good results announcements); Larsen & Toubro (3.74%); Jaiprakash Associates (up 3.33%) and Wipro (3.23%). Nifty 50 stocks had 48 gainers and 2 losers—Tata Power was down 0.30% and Sesa Goa fell 2.56 percent. Today’s gain on the NSE was on the back of today’s trade of 54.28 crore shares, close to its 10-day average of 54.44 crore shares.
Despite the good jump in the index, the NSE had an advance-decline ratio of a weak 87:387. At home, there was a mix of good and bad news. Finance Minister Pranab Mukherjee today said that foreign direct investment (FDI) in April-August period has doubled to $16.80 billion. However, he warned that the global slowdown would impacting India’s growth prospects, but expressed hope that inflation will start moderating from December. He added that the tight monetary policy regime followed by the RBI (Reserve Bank of India) has also impacted growth during the current fiscal.
Mr Mukherjee also said that the G-20 nations have started thinking over the issue that the euro-zone nations should first "credibly assess" their own solvency issues before the international community could extend any help.
Countries outside the euro-zone have warned of the damage the European crisis was already doing to their economies and underlined the urgent need for action from the 17-nation single currency area.
ONGC was up 1.80% after the additional secretary in the department of disinvestment, Sidhartha Pradhan, today said that ONGC's follow-on public offer (FPO) may take place next month, originally deferred due to weak market conditions. The government plans to divest 5% stake in ONGC through an FPO.
The government aims to raise Rs40,000 crore through the sale of stakes in state-run companies this fiscal year through March 2012 (FY 2012), but it has been able to raise only about Rs1,145 crore so far due to weak market conditions.
SBI was up 2.99% as Banking Secretary DK Mittal said today that the state-run lender will not raise funds through a rights share issue this fiscal year and the government, the largest shareholder, will capitalise the bank by other means.
The IRDA monthly journal focuses on customer grievances and the ways in which to deal with them. While a number of issues have been acknowledged, the way in which to deal with them may remain on paper, unless insurance companies follow guidelines—and if IRDA acts when insurers don’t
The Insurance Regulatory and Development Authority (IRDA) October journal has its focus on ‘Grievance Redressal’. While customer problems have been acknowledged, the ground reality suggests that solutions are yet to be implemented. The biggest proof of it is that a few days back, IRDA came up with a circular asking life and non-life companies not to reject claims on technical grounds of delay in filing (See: IRDA asks insurers not to reject health insurance on a routine basis, but don’t pin much hope on this directive ).
The primary target of this circular is mediclaim insurers—some of whom have stringent filing deadlines. This has led to a lot of complaints to IRDA from policyholders for genuine claims rejection.
The IRDA journal has an article, ‘Managing the Pain Points for the Customer’ by the general manager (GM) of United India Insurance. Here are some of the statements made by the GM—and the ground reality, which in a few cases, pertains to United India Insurance itself:
From a buyer, Anil Ambani is now a seller
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