Nifty should rise above 6,115 gaining some strength
Thursday’s fall on the Indian bourses wiped off most of the gains of the past two days and brought a halt to the four-day winning streak. The fall followed from the weakness in the Asian indices and weak closing of the US market. Asian stocks declined Thursday as a private survey showed a faster-than-estimated drop in China's manufacturing in February. US indices were pulled down after the minutes from the Federal Reserve's policy setting meeting revealed little consensus about when short-term rates would begin to rise.
The BSE 30-share Sensex opened at 20,661 while the NSE Nifty opened at 6,127. The indices moved in a narrow range. The Sensex moved between 20,522 and 20,663 and closed at 20,537 (down 186 points or 0.90%), while Nifty moved in the range of 6,086 and 6,129 and closed at 6,091 (down 61 points or 1%). NSE recorded a volume of 50.51 crore shares.
The International Monetary Fund, in a staff report prepared for central bankers and finance ministers from the Group of 20, said on Wednesday that significant downside risks remain for the world economy.
US indices closed lower. Federal Reserve policy makers backed away from their year-old commitment to consider raising interest rates when unemployment falls below 6.5%. Minutes of their January meeting showed that several policy makers also said that in "the absence of an appreciable change in the economic outlook, there should be a clear presumption in favour" of continuing to trim the Fed's bond purchases by $10 billion at each meeting.
Atlanta Federal Reserve President Dennis Lockhart said he expects a mid-2015 interest-rate hike.
A larger-than-expected drop in home construction in January also weighed on sentiment. Construction on new US homes tumbled 16% in January to a seasonally adjusted annual rate of 880,000, with drops for single-family homes and apartments, according to Commerce Department.
Except for Jakarta Composite (up 0.12%) all the other Asian indices closed in the red. Nikkei 225 was the top loser (2.15%).
A Chinese manufacturing index fell to the lowest level in seven months in February, adding to challenges for Communist Party officials grappling with risks to the financial system from trust defaults and soured loans. The preliminary February reading of 48.3 for a Purchasing Managers' Index released by HSBC Holdings Plc and Markit Economics compared with January's final figure of 49.5.
Japan's trade deficit widened to a record in January on the back of surging import costs. The 2.79 trillion yen ($27.3 billion) shortfall reported by the Ministry of Finance in Tokyo today. Imports rose 25% from a year earlier and outbound shipments gained 9.5%.
Singapore's economy expanded last quarter after a pick-up in manufacturing at the year end, with the government predicting an improvement in overseas demand in 2014 amid a global recovery. Gross domestic product rose an annualized 6.1% in the three months through December from the previous quarter, when it climbed a revised 0.3%, the trade ministry said in a statement today.
European indices were trading in the red while US Futures were trading marginally lower.
Pushpam Appalanaidu, MD of QuestNet India was arrested at Chennai International Airport following a look out notice from the Andhra Pradesh CID. Appalanaidu, a Malaysian, faces 21 criminal cases of cheating for duping investors for Rs160 crore
Immigration authorities at the Chennai International Airport has arrested Malaysian Pushpam Appalanaidu, who is wanted by the Andhra Pradesh police in several cases of cheating investors for around Rs160 crore through multi-level marketing (MLM) schemes. Appalanaidu was known as managing director of QuestNet India, the previous avatar of QNet in the country.
According to a report from The Hindu, the 50-year-old accused, Pushpam Appalanaidu, a Malaysian, faces 21 criminal cases of cheating and the Prize Chits Money Circulation Schemes (Banning) Act 1978 too was invoked against her.
"Criminal Investigation Department (CID) officials had issued a look-out to Immigration officials in Delhi, which was sent to all international and domestic airports in the country. The woman was caught by authorities at the Chennai airport as she was about to board a flight for Malaysia," the report says.
Appalanaidu along with four other accused had floated a MLM company and indulged in alleged illegal company activities by collecting deposits from investors in Andhra Pradesh by promising high returns, CID official told PTI.
Following police action, both QuestNet and GoldQuest, the multi-level marketing (MLM) companies run by QI group of Malaysia shut shop in 2009. They now call themselves QNet, which is also under the lens and the economic offenses wing (EOW) of Mumbai Police as well as Enforcement Directorate are probing the operations of the company.
In India, it was registered as GoldQuest International India Pvt Ltd in 2001. Elsewhere QuestNet Enterprises was registered in November 2004 in Chennai. Between them, they had offices at Bangalore, Mumbai and Hyderabad.
Although QuestNet’s claims about its legitimacy was an important part of its sales pitch, government agencies too were uncomfortable about its operations and at that time the Intelligence Bureau (IB) sent out a report questioning its activities to several government agencies.
Both GoldQuest and QuestNet used to sell a pair of limited edition, numismatic medallions for around Rs30,000 that were made in Germany. These had images of Indian deities, the ka’abah, Bhagwan Mahavir, the Pope and Mother Theresa; it also had coins for major world sporting events-in fact, it had coins for every interest group. The coins were sold through closed-group presentations led by influential people - doctors, lawyers, sports stars - and the products were pitched at those who can cough up Rs30,000 for a pair of medallions of doubtful value (limited edition coins don’t necessarily appreciate in value). The emphasis at these meetings was on establishing the apparent legitimacy of the scheme by displaying documents about its tax filing, apparent government permissions and its ISO 9001:2000 certification.
However, the selling point was not the value of the coins or their potential appreciation. Each buyer of coins, who puts down 30 grand, was supposed to persuade two others to join the scheme and purchase coins. When that happens, the originator gets back a part of his money in line with a detailed matrix, which is spelt out on its website without indicating the exact returns earned.
Coming back to Appalanaidu, during August 2009, JR Mayer, the managing director of QI Group sent an invite to Moneylife's managing editor Sucheta Dalal. Mayer, in the letter, said, "Due to the legal challenges that both the companies have been facing, in India for over a year now it has unfortunately led to both companies being forced to halt their operations and temporarily close down their offices. However the companies are by no means non-existent. Thus the MD of QuestNet India, Ms Pushpam Appalanaidu has not been in any position to make media statements or invite the media to an open forum to answer questions about the two entities."
QI group units were actually banned in 2009 while operating under the names of Goldquest International Pvt Ltd and Questnet Enterprises India Pvt Ltd. In fact, the Ministry of Corporate Affairs in its report for 2010-11 has specifically shown both these companies as being under investigation by Serious Frauds Investigation Office (SFIO).
The EOW of Mumbai Police, which is also probing the MLM fraud, had so far arrested nine team leaders of QNet for allegedly duping investors by offering to sell products such as magnetic disks, herbal products and holiday schemes through fraudulent practices. The accused have also been charged with cheating and forgery under relevant sections of the Prize, Chits and Money Circulation Schemes (Banning) Act 1978, similar to Appalanaidu.
You may also want to read…