Stocks
Friday Market Report: A short-term bounce possible

Too much of pessimism; could lead to a short rally in Sensex and Nifty

 The market suffered a vicious third day of decline on Friday. The Sensex and the Nifty started lower at the opening and continued to fall sharply throughout the day. Towards the afternoon, panic selling gripped the market when it hit a low of 18,235 in the Sensex and 5,459 in the Nifty after a freefall. In the last hour, short covering and some value buying pulled the market higher.

The Sensex closed at 18,396 and Nifty at 5,512. The advance decline on the NSE was 182:1,551. With this, the market has suffered a third consecutive day of sharp decline. This follows a five-day lull before which the market had declined for over 10 days. We expect a short rally to start soon.

Stocks from technology and oil and gas sectors were in demand in early trade. The market tumbled into the negative territory and witnessed a gradual decline as the day progressed on offloading by institutional investors. The market touched its intra-day low in late trade, but witnessed a minor recovery albeit settling in the red.

In line with the market, the market breadth on the benchmarks was also negative. The Sensex settled with 22 losers and 8 gainers while the Nifty retired with 39 declining stocks and 11 in the advancing list. The broader markets were hammered in today's trade with the BSE Mid-cap index tanking 2.66% and the BSE Small-cap index tumbling 3.59%.

All sectoral indices ended the week at lower end. BSE Realty (down 4.96%) BSE Consumer Durables (down 3.91%), BSE Auto (down 3.56%) BSE Capital Goods (down 3.06%) and BSE Power (down 2.47%) were the top losers among indices.

The top performers on the Sensex were ONGC (up 1.89%), Reliance Infrastructure (up 1.13%) and Hindustan Unilever (up 0.54%). On the other hand, DLF (down 7.02%), Mahindra & Mahindra (down 4.93%) and Hindalco Industries (down 4.27%) ended at the bottom of the list.

Expressing concern that the black money stashed in banks abroad might have originated from arms deals, drug trafficking and smuggling, the Supreme Court has asked the government as to what action it had taken against individuals and firms having foreign accounts.

The court also sought replies from the government, Reserve Bank of India (RBI) and Chief Vigilance Commissioner (CVC) on a petition seeking direction to the government to ratify the United Nations convention on corruption, which would facilitate it in bringing back black money from foreign banks.

Markets in Asia ended mostly lower on profit-taking and a cut in Japan's credit rating, which impacted investor sentiment as local banks are big holders of government bonds. The Chinese market ended higher as investors chose to ignore new real-estate tax levies announced on Thursday.

The Hang Seng declined 0.68%, the Jakarta Composite fell 0.77%, the KLSE Composite lost 0.33%, the Nikkei 225 tanked 1.13% and the Seoul Composite was down 0.34%. On the other hand, the Shanghai Composite added 0.14%, the Straits Times gained 0.31% and the Taiwan Weighted rose 0.47%.

Back home, the Reserve Bank of India (RBI) today invited public comments on Malegam panel report, which suggested among other things capping interest rate at 24% for loans extended by microfinance institutions (MFIs).

The committee, headed by RBI Central Board director YH Malegam, also suggested that small loans cannot exceed Rs25,000 and creating of a separate category of non-banking financial companies (NBFC-MFI) for the MFI sector.

Foreign institutional investors were net sellers of Rs1,651.41 crore in the equities segment on Thursday. Domestic institutional investors also offloaded stocks worth Rs255.59 crore.

Simbhaoli Sugars (up 1.18%) today announced a joint venture with UK-based trading firm ED&F Man Holdings (EDFM) to set up a sugar refinery in Gujarat at an investment of Rs228 crore. Simbhaoli will have 57.5% stake in the joint venture company Uniworld Sugars (USL), while EDFM will have the remaining. The greenfield sugar refinery would be set up at Kandla in Gujarat with a capacity to refine 1,000 tonnes of sugar every day.

Adani Enterprises (down 5.81%) today announced a partnership with Japanese group Kowa Company, for cooperation in the infrastructure and other areas. The pact will empower Kowa to act as a first contact for Adani's business operations in Japan and Adani will act in similar capacity to facilitate Kowa's interests in India. As per the agreement, Kowa will help Adani initiate business with Japanese firms, in areas like ports, shipping, coal mining, transportation of coal and power.

Fortis Healthcare (up 0.89%) today said it has entered into an agreement with the promoters of the Lifeline Hospital at Alwar in Rajasthan to operate and manage the 100-bed facility. The move is in line with Fortis' strategy to strengthen its presence in India's tier-II cities. The addition of Lifeline Hospital takes the Fortis network to a total of 53 hospitals with over 8,000 beds spread across 13 states in the country.

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RBI seeks public comments on Malegam report

The RBI has invited views/comments of all stakeholders and the public at large on the Malegam Committee report on MFIs, latest by 13 February 2011

Mumbai: The Reserve Bank of India (RBI) today invited public comments on the Malegam panel report, which suggested among other things capping interest rate at 24% for loans extended by microfinance institutions (MFIs), reports PTI.

The committee, headed by RBI Central Board director YH Malegam, also suggested that small loans cannot exceed Rs25,000 and creating of a separate category of non-banking financial companies (NBFC-MFI) for the MFI sector.

"The RBI has invited views/comments of all stakeholders and the public at large on the Malegam Committee report on MFIs... Latest by 13 February 2011," the central bank said.

RBI constituted the committee in October last year in the wake of allegations of overcharging and use coercive recovery practices by MFIs that led to a spate of suicides in Andhra Pradesh. The committee submitted its report on 19th January.

These recommendations, the committee said, should be implemented from 1 April 2011.

The panel also said small loans of up to Rs25,000 could be given to families having an income up to Rs50,000 per annum. On repayment, it said, the borrowers should be given the option of weekly, fortnightly or monthly return of the loan.

Industry body Microfinance Institution Network (MFIN) has termed the recommendations as balanced.

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Emkay Global Financial Q3 net profit increases to Rs4.24 crore

Emkay Global Financial Services Ltd said its net profit for the December 2010 quarter stood at Rs4.24 crore compared to Rs3.82 crore.

The company's total income for the December 2010 quarter increased to Rs35.33 crore from Rs33.83 crore.

On Friday, Emkay Global ended 7.99% down at Rs61.60 on the Bombay Stock Exchange, while the benchmark Sensex closed 1.54% down at 18,395.97 points. 

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