Moneylife offers its readers a unique service—helping redress grievances on a best-effort basis....
Markets in the US closed mixed on Wednesday on profit-booking after the recent gains while those in Asia were lower in early trade this morning
The local market is likely to see a range-bound opening on tepid global cues. The US markets closed mixed on Wednesday on profit-booking after the recent surge in key indices. Markets in Asia were trading lower in early trade on Thursday, tracking the weak US markets and ahead of the Bank of Korea’s policy meeting on Friday. The SGX Nifty was down 33 points at 5,249 against its previous close of 5,282.
As expected, stocks opened on a pessimistic mode on Wednesday. The Sensex and the Nifty had a negative opening at 17,724 and 5,293. However, after the market quickly hit the lows in the first half hour, there was a strong revival; the indices made up the day's losses and were in the green intermittently. However, sellers took over in the last two hours, following rumours about action against Anil Ambani group companies, sending the Nifty to the day's low of 5,223 and the Sensex to 17,500. The silver lining for the bulls is that there was a significant fightback in the last half hour of trading, when the Nifty revived by as much as 50 points from the day's low.
With Wednesday’s fall, the market has declined for four days in a row. Also, the fall over these four days amounts to 331 points on the Nifty and 1,042 points on the Sensex. In the two previous rounds of decline, the Nifty fell by 399 and 483 points and the Sensex by 1,359 points and 1,661 points. If yesterday’s lows hold, there is a chance that bulls will enjoy a sharp rally. Whether it is a temporary one, we don't know now.
Markets in the US closed mixed on profit-booking after the recent gains. However, the Dow notched its eight straight day of gains, boosted by Walt Disney Company and Coca
Cola as they reported higher quarterly revenues. In the banking segment, Wells Fargo & Company declined on reports that its chief financial officer was retiring.
Commenting on the economy, Federal Reserve chairman Ben Bernanke said that the labour market remains a concern and that inflation would continue to remain sluggish.
The Dow added 6.74 points (0.06%) at 12,239.89. The S&P 500 lost 3.69 points (0.28%) at 1,320.88 and the Nasdaq shed 7.98 points (0.29%) to close at 2,789.07. Both the Dow and the S&P 500 are at 2-1/2-year highs.
Tracking the weak US markets overnight, bourses in Asia were trading lower in early trade today. Expectations of rate increases in other nations in the region will follow China's move to raise its rates were also weighing on sentiment.
The Hang Seng was down 0.58%, the Jakarta Composite tumbled 1.66%, the KLSE Composite tanked 1%, the Nikkei 225 fell 0.04%, the Straits Times declined 0.58%, The Seoul Composite was down 0.39% and the Taiwan Weighted lost 1.16%. On the other hand, the Shanghai Composite gained 0.27% in early trade.
Back home, environment minister Jairam Ramesh on Wednesday gave forest clearance to Steel Authority of India (SAIL) for mining iron ore from Chiria reserves in Jharkhand, overturning the recommendation of his Forest Advisory Committee for the second time in a month. The approval for SAIL, a Maharatna, was however given with 13 specific conditions.
The minister said that one of the factors behind the approval for the project, which was mired in several controversies, was that “Chiria is essential for the future of SAIL”.
It is estimated that clearance of large tracts under land ceiling law may have lost state government Rs500 crore
The Bombay High Court has suggested that a probe be conducted by the Central Bureau of Investigation (CBI) into the huge number of allegedly fraudulent clearences given for construction on large tracts of land in Pune over the past three decades.
The suggestion by Judges BH Marlapalle and UD Salvi was made during the hearing of a public interest petition on this issue by Bharatiya Janata Party Maharashtra spokesperson Madhav Bhandari yesterday.
"There are 245 (such) fraud orders which have made this land scam possible. The whole bureaucracy is involved, and the government knows about it. It is high time a step is taken against the corrupt people," Mr Bhandari said today.
The issue involves the grant of no-objection certificates by the government to landholders who own more than 500 square metres. Under the now defunct Urban Land Ceiling Act (repealed in 2007), any construction on an area of above 500 sq m required a clearance from the state government. Such projects were to be regularised only after the landholder agreed to cede 5% of the land to the state government for housing the poor.
However, hundreds of projects were cleared and lakhs of square metres of land that could have been got for housing the poor was used for private projects yielding huge profits. This phenomena was detected by an additional collector in 2005, and some 29 such fraudulent cases were revealed. An inquiry by the CID, subsequently, did not make much headway.
This is when the BJP filed a public interest petition contending that large tracts of land in Pune had been declared as "non-surplus" through fraudulent orders and were exempted from surrendering to the government.
BJP spokesperson Mr Bhandari alleged that former chief minister Vilasrao Deshmukh and the then deputy chief minister RR Patil were instrumental in stopping the CID inquiry into this matter.
"Why was there no investigation?" Mr Bhandari asked, during a telephone conversation with Moneylife. "The government has tried to whitewash the issue. Mr Deshmukh fined an official-whom he knew quite well-but penalising someone is hardly a remedy. That is just regularising the crime."
Labelling this matter as a "mini 2G" scam, the High Court judges remarked that the Pune land affair-estimated at over Rs500 crore-was far worse than the Adarsh society case.
In one of the cases that was investigated in 2005, one of the beneficiaries had to pay a fine of about Rs8 crore. "If the penalty from one accused could get the state exchequer Rs8 crore, the more than 300 files awaiting scrutiny by the state CID can yield a lot of money for the state coffers," the petition said.
"The very fact that the Court has suggested a CBI inquiry explains how concerned the judiciary is about this matter," Mr Bhandari said. "What is required is that the culprits and the ministers who put a stop to the investigation must be hauled up."
Such cases are only worsening the already sullied image of the real estate business. Pankaj Kapoor, managing director, Liases Foras, a realty research firm, said, "We are seeing a high level of irregularities in the real estate sector. The sector has been one area which is quite common in all kinds of scams. Real estate companies are involved even in the 2G scam."
Mr Kapoor stressed that "the government should become more accountable now and come forward to regularise the (real estate) sector as these kind of scams put urbanisation and the real estate market off balance."