Friday’s Market Preview: Cautious opening expected

The local market is likely to witness a cautious opening on unimpressive cues from the Asian region and in the absence of triggers from the US markets, which were closed for the Thanksgiving Day holiday. The Asian pack was mostly lower in early trade today on reports that the South Korean defence minister has quit in response to shelling by North Korea and on concerns over the pace of the global recovery. The SGX Nifty was down 15 points at 5,842 over its previous close of 5,857.

The initial public offer of MOIL Ltd opens today, which may lead to funds being diverted for investing in the offer.

The market opened on a firm note yesterday tracking its Asian peers that were trading with modest gains. Choppiness, associated with the expiry of the November futures and options (F&O) contract, made its presence felt since the opening bell. The indices slipped lower in the noon session despite a fall in the weekly food inflation numbers, but bounced back a short while later. However, a downward revision in ratings of some PSU banks that were in the news on account of the housing loan scam dragged the indices sharply lower in the late session. The bellwether Sensex closed at 19,318.16, down 141.69 points (0.73%). The Nifty stood at 5,799.75, a decline of 66 points (1.13%) over its previous close.

Markets in Asia were mostly lower as tensions continued in the Korean peninsula after South Korean defence minister quit in response to the shelling by North Korea earlier this week. A debate on whether the European Union should increase the size of the 40 million euro bailout fund for Euro zone governments, also weighed on investors’ minds.

The Shanghai Composite shrank 1.03%, the Hang Seng was down 0.08%, the KLSE Composite shed 0.01%, the Straits Times fell 0.05%, the Seoul Composite was down 0.47% and the Taiwan Weighted declined 0.20%. On the other hand, the Jakarta Composite was up 0.07% and the Nikkei 225 gained 0.09% in earl trade. The SGX Nifty was down 15 points at 5,842 over its previous close of 5,857.

Back home, A Group of Ministers (GoM) will meet next Monday to consider partially freeing urea prices with the aim of attracting fresh investment in the fertiliser sector.

“The GoM, headed by finance minister Pranab Mukherjee, will consider freeing the price of urea at the November 29 meeting,” a source in the fertiliser ministry said.

As urea is the fertiliser most widely used by Indian farmers, the UPA-led government intends to free the price in a “calibrated” way, without going for total decontrol at one go, the source said.


FM asks lenders to check exposure to firms named by CBI

New Delhi: Finance minister Pranab Mukherjee today directed public sector lenders and insurers to look into their exposures to various companies mentioned in the Central Bureau of Investigation (CBI) application filed in court in connection with housing finance racket busted by the investing agency yesterday, reports PTI.

At a review meeting with officers of the Department of Financial Services (DFS) on the situation arising out of the CBI case involving top officials of LIC Housing Finance and some banks, the finance minister also asked board of directors of lenders to carry out a fresh assessment of their non-performing assets.

Among the companies named by CBI yesterday are financial services firm Money Matters, DB Realty, Pashmina Ltd, Mantri Realty, Sigrun Ltd, Entertainment World and Indore City Treasures.

DFS said that the racket was an isolated instance of alleged gratification.

“DFS also conveyed that as per information available with them, the asset quality in these cases have not been impaired,” a finance ministry statement said today.

Mr Mukherjee said while CBI will take necessary action as per its mandate, banks and financial institutions should be instructed to take appropriate action against these individuals as per established procedure.

He also directed banks and financial institutions to strengthen the NPA monitoring and management in their institutions to ensure that advance action is taken to identify incipient sickness and take appropriate action thereon.

The finance minister asked these lenders to be ensure that all procedures and due diligence consistent with board approved guidelines have been followed while approving loans by the competent authority.

He wanted the DFS, regulatory authorities and institutions to take immediate action to review and strengthen the procedures further in this regard.


BSE revises free-float adjustment factor of 39 stocks

The Bombay Stock Exchange has decided to revise the free-float adjustment factor (FFF) of 39 stocks in various indices. The revision is part of the quarterly review of the index constituents based on the shareholding pattern filed for the quarter ended September 2010.

Power Grid Corporation’s FFF has been revised to 0.35 from 0.15 earlier. The stock is a constituent of the BSE-100, BSE-200, BSE-500 and BSE Power indices. Pipavav Shipyard’s FFF has been revised to 0.20 from 0.25. The stock is a constituent of BSE-500, BSE IPO and BSE Mid-cap indices. Cox & Kings’ FFF has been revised to 0.35 from 0.30. Cox & Kings is a constituent of BSE-500, BSE IPO and BSE Mid-cap indices.

Similarly, SpiceJet’s FFF has been revised to 0.65 from 0.85. The stock is a constituent of the BSE-500 and BSE Mid-cap indices. KS Oils’ FFF has been revised to 0.60 from 0.50. The stock is a constituent of BSE-500 and BSE Mid-cap indices.  Ansal Properties & Infrastructure, which is a constituent of BSE-500 and BSE Small-cap indices, has been revised to 0.45 from 0.40 earlier. The FFF of Panacea Biotec, a constituent of BSE-500 and BSE Small-cap indices, has been revised to 0.30 from 0.35.

The revised free-float adjustment factors would come into effect from 29 November 2010.


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