Friday Closing Report: The bias is to the downside; watch 18,000

It was another day of late selling that spooked the domestic market. The indices opened weak on dour economic news from the US-the world's largest economy. The benchmarks recovered quickly and were trading in the green till the post-lunch session. The Sensex and the Nifty touched their intraday highs of 18,244 and 5,472, respectively buoyed by a strong opening by influential European markets. But later, the market succumbed to selling pressure from heavyweights that saw the indices ending off the low point of the day.

The Sensex ended at 18,144, down 28 points (0.1%), off its intraday low of 18,118. The Nifty settled at 5,439, down 7 points (0.1%).

The overall market breadth was negative today. Out of the 30 Sensex stocks, 22 ended in the red and eight were in the green. Of the 50 stocks that make up the Nifty, 30 declined, 19 advanced while one returned unchanged. The broader indices, once again, ended in the positive terrain. The BSE Mid-cap index was up 0.1% and the BSE Mid-cap index was up 0.24%.

The top Sensex gainers were Tata Motors (up 3.9%), ITC (up 1.8%), HDFC (up 1.4%), Jindal Steel and ACC (up 1% each). The laggards were led by Hero Honda (down 1.4%), Tata Steel and TCS (down 1.3% each), DLF and State Bank of India (SBI) (down 1% each).

The top BSE sectoral gainers included consumer durables (CD) (up 1%), fast moving consumer goods (FMCG) (up 0.7%) and auto (up 0.4%). The sectoral losers were bankex (down 0.6%), information technology (IT) (down 0.5%) and public sector undertaking (PSU) 0.4%.

The Reserve Bank of India (RBI) has said its ability to conduct the monetary policy freely has again come under threat due to the influence of the government's fiscal policies.

"Like in most countries, in India too, fiscal stimulus was part of the crisis response and monetary policy had to acquiesce in elevated government borrowing. Going forward, the challenge for the government is to continue the fiscal consolidation and for the Reserve Bank to regain the space to conduct monetary policy free of fiscal compulsions," RBI governor D Subbarao said on Thursday.

Asian markets closed mixed today as investors preferred to stay on the sidelines ahead of the US non-farm payroll data due to be released later today. Russia's ban on wheat exports pulled up agriculture-related stocks in the region. The Shanghai Composite was up 1.4%, Hang Seng was up 0.6%, Jakarta Composite was up 0.5% and Taiwan Weighted was up 0.3%. On the other hand, KLSE Composite was down 0.1%, Nikkei 225 was down 0.1% and Straits Times was down 0.4%.

The US has said it is exploring all options, including legal tools, to force India to open up its agriculture market, especially the dairy sector.

US Trade Representative, Ron Kirk who has been to India twice and soon would be travelling to New Delhi, said that he has raised this issue of opening up of the agricultural market, in particular those of dairy products, at the highest level.

US markets ended lower on Thursday, weighed down by disappointing economic news that fuelled concerns about the pace of the economic recovery. Weekly jobless claims data revealed initial claims for jobless benefits rose to 479,000, the highest level since early April. Besides, sales at 30 retail chains rose 3%, less than the 3.2% average forecast by analysts. The Dow fell 5 points (0.05%) to 10,674.98. The S&P 500 fell 1 point (0.1%) to 1,125.81. The Nasdaq fell 10 points (0.4%) to 2,293.06.

Foreign institutional investors were net buyers in the equities segment to the tune of Rs73 crore on Thursday. Domestic institutional investors were net sellers of Rs187 crore on the same day.

Raymond Ltd (up 0.3%), the largest integrated manufacturer of worsted fabric in the world, has reduced its net loss to Rs24.88 crore in the first quarter of the current financial year as compared to the loss of Rs31.60 crore in the corresponding quarter of the previous year. Total income of the company reported a marginal increase to Rs244.26 crore as compared to Rs239.94 crore in the same period of the previous year.

Telecom service provider Aircel recorded the highest growth of 37.2% among operators in 2009-10, while Bharti Airtel (down 0.7%) retained its leading position, according to a survey by journal 'Voice and Data'.

Bharti Airtel retained its leading position among telecom service providers and posted a growth of 5% to end 2009-10 fiscal with revenues of Rs38,800 crore, the survey said.

Turnkey engineering major BGR Energy Systems Ltd (up 1.8%) has inked joint venture (JV) agreements with Hitachi Ltd, Japan, and Germany-based Hitachi Power Europe GmbH, a Hitachi subsidiary.

The first JV with the Japanese company is for design, manufacture, installation and commissioning of supercritical steam turbines and generators for thermal power plants while the second one with Hitachi's German arm, would be for supercritical steam generators for thermal power plants.


LIC plans to invest Rs2,00,000 crore across asset classes in FY11

Mumbai: State-owned insurance giant, Life Insurance Corporation of India (LIC) plans to invest Rs2,00,000 crore across asset classes in the current fiscal, up from the Rs1,92,000 crore last fiscal.

"We have internally targeted to invest Rs2 lakh crore across asset classes by end-this fiscal," LIC's chairman T S Vijayan told reporters here after announcing a valuation surplus on investments of over Rs23,000 crore last fiscal.

The targeted premium collection for the year is Rs2,01,000 crore, he said.

In the first quarter of 2010-11, LIC invested Rs39,000 crore, of which Rs10,000 crore was in equities, he said.

Mr Vijayan, however, refused to give the equity component of the targeted Rs 200,000 crore investment, saying it depends on the premium collection from the Unit-Linked Insurance Policies (ULIPs).

For 2009-10, ULIPs' share in the total premium pie of Rs1,85,000 crore was 75% and the total equity investments made by LIC stood at Rs61,000 crore.

If the markets are good, people invest in ULIPs and if the interest rates are good, their preferences turn to non-linked policies, Mr Vijayan said.

LIC also has a head-room to issue infrastructure bonds of Rs5,000 crore this fiscal but has not yet decided on any timeline for it, Mr Vijayan said.

"Under a new policy, we can issue bonds to the tune of 25% of our incremental investments of Rs25,000 crore in infrastructure sector last year," he said.

The life insurer is also targeting to invest Rs1,000 crore in real estate and property this fiscal, Mr Vijayan said, clarifying that it is done under three themes of turning the property into an office, floating a housing scheme for policy holders or as a pure investment to be exited at a later date.

When asked about LIC's expansion plans, Mr Vijayan said the corporation is in "advanced stages" of discussions to set up a wholly-owned subsidiary in Singapore.

On the back of new norms on promoter holdings being announced, Mr Vijayan said LIC is not interested in taking a majority stake in any of its investee companies in the future.

The corporation will be adding more than the usual three to four new policies per year this fiscal due to revisions in ULIP norms announced by industry regulator Insurance Regulatory and Development Authority (IRDA) coming into effect from 1st September. 


Kotak Life Insurance appoints Subhasish Acharya as head of tied channel

Kotak Mahindra Old Mutual Life Insurance Ltd (Kotak Life Insurance) said it appointed Subhasish Acharya as its executive vice president and head of tied channel.

Mr Acharya will oversee all activities concerned with the channel, including strategy formulation, effective process and system implementation, service quality, throughput and customer satisfaction, it said in a release.  

In his immediate prior assignment, he worked with Kotak Mahindra Bank. Earlier he held positions of significant responsibility in ICICI Bank and Kotak Mahindra Bank before moving to Kotak Life Insurance.


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