Stocks
Indecisive market: Weekly Market Report

If the Nifty breaks Friday’s low, it may head for 5,200

 
The market closed in the positive for the second week in a row on hopes that the Indian government would renew efforts to push growth-oriented reforms and easing of global uncertainties. Going ahead, headline inflation numbers for July, which will be announced on Tuesday, will lead the market in the holiday-shortened week.
 
The Sensex closed the week at 17,758, up 360 points (2.09%) and the Nifty climbed 105 points (2.01%) to settle at 5,320. The market is now in an indecisive phase. If the Nifty breaks Friday’s low, it may head for 5,200.
 
The indices closed higher on Monday on firm global cues and sustained buying in blue chips. The market closed in the positive for the second day on Tuesday on assurances from the new finance minister to look at easing interest rates and review the retrospective tax provisions. On Wednesday the benchmarks pared all their gains to settle flat on selling pressure in Bharti Airtel on account of its dismal quarterly performance and lower growth forecast by global research entities.
 
Dismal industrial production numbers for June, forecast of lower GDP growth and not so impressive corporate results resulted in the indices settling lower on Thursday. The market settled flat with a negative bias on Friday following a clutch of disappointing quarterly results and subdued global cues.
 
Among the sectoral indices, BSE Auto and BSE IT gained 4% each while BSE Consumer Durables settled 2% down in the week.
 
The top gainers on the Sensex were Sterlite Industries (up 9%), Mahindra & Mahindra (up 8%), Hindustan Unilever (up 7%), Reliance Industries and Hindalco Industries (up 5% each). The key losers were Bharti Airtel (down 14%), State Bank of India (down 6%), Hero MotoCorp, Dr Reddy’s Laboratories (down 2% each) and HDFC (down 1%).
 
The Nifty leaders were Sterlite Ind (up 9%), M&M (up 8%), HUL (up 7%), Ambuja Cements and Kotak Mahindra Bank (up 6% each). Bharti Airtel (down 14%), SBI (down 6%), Ranbaxy (down 5%), Bank of Baroda (down 4%) and Cairn India (down 3%) were the key losers on the index in the week.
 
Industrial production declined by 1.8% in June, mainly due to poor show by the manufacturing and capital goods sectors, indicating a persistent slowdown in the economy. Similarly, industrial output in the April-June quarter too contracted by 0.1% this fiscal. “The June 2012 IIP numbers are disappointing and are a cause for serious concern,” an analyst opined.
 
Moody’s Analytic, a unit of Moody’s Investment Services, lowered the GDP growth forecast of India to 5.5% for 2012 and 6% in 2013, from 6.2% estimated earlier. The agency cited lack of government or RBI action despite a broad-based slowdown, as well as a poor monsoon. CLSA and Citigroup also cut their outlooks for India to 5.4% and 5.5%, respectively, although for the fiscal year ending in March 2013.
 
While the Eurozone debt issues are still lingering, global markets were comforted by a plan of action laid out by European Central Bank president Mario Draghi, even though it lacks clarity. This apart, The US Federal Reserve has promised to take action if needed, and traders are eying its September meeting for an announcement of a new bond purchase program.
 

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COMMENTS

sachchidanand

5 years ago

Markets are running ahead of fundamentals. Lot is being expected from Chidambaram but his past involvement in scams will come home to roost and he will fare no better than Pranab in taking drastic steps for reviving economy. As we inch towards 2014, politics will take front seat. Liquidity game will peter out and there could be a big fall in markets.

Shun plastics! Bring back the reusable and recycled cotton or jute bags

Shun the plastic bag and carry a reusable cotton/jute bag when going shopping! If each one of us can spare a few minutes, we can make the earth a better place to live


Although India is reeling under the depressive conditions of the poor monsoons with most areas having received inadequate rainfall, customary preparations are underway to celebrate the Diwali festival a few months from now.
 
As a general rule, Indians are resilient enough to overcome the setbacks and are born optimists who always look forward to a better tomorrow than today. Somehow, things will change for the better, is their ‘gut’ feeling all the time.
 
They are quick to realize their own mistakes but not courageous enough to openly admit their faults. And most manage to not repeat their mistakes. Yet, they are quick to find fault with others, a trait that runs deep in their system, but, again, they would not like to admit it in their own selves!
 
Often, they are exposed to attend meetings, seminars and workshops or conferences that cover the need to protect the Environment. They hear about how each one can really make a contribution to preserving the environment and saving the earth from untold havoc that plastics can and cause, by careless disposal methods.
 
It is not about the plastic cards that they carry in their wallets that cause real trouble and havoc in their finances but the bags that they get when they go for shopping, whether it is to buy a kilo of onions or a few home required items of grocery! Soon after they reach home, these plastic bags land in the garbage cans, which, ultimately are dumped here, there and everywhere!
 
Though the death toll would vary from city to city, it is the stray cattle that become victims when they munch through the garbage and get choked. In many places these dumps are also hunting ground for stray dogs and street scavengers who go through the rubbish to collect recyclable waste.
 
Unlike the westerners, whom we ape in more ways than one, we have not yet learnt the real civic responsibility is disposing the rubbish we generate every day at home in terms of segregating the usable and the unusable waste.
 
For instance, most the wet waste, such as the vegetable peels, stems, leaves, etc can be converted into organic manure to start small kitchen gardens and make the earth a better place to live in. After all, more greenery will automatically invite nature's reaction by greater rainfall than we have today. Every city can be a garden city!
 
We started this issue with Diwali, didn’t we? Yes, most business houses have either placed or in the process of placing orders for their Diwali gift boxes that would carry a variety of sweets, dry fruits and so on. Sometimes, these gift boxes will themselves be recycled and one may pass on the incoming gift to another. After all, what can one do when he/she receives so many gift boxes from well wishers?
 
Of course, these colourful expensive cardboard boxes, gift wraps, plastic boxes and trays will eventually find their way to the garbage piles, only to be collected by poor scavengers for recycling.
 
What is the simple step that we can take?  Shun the plastic bag and carry a reusable cotton/jute bag when going shopping!
 
As for the business houses, here is a clarion call—why not make this year, the year of the cotton gift bag and make it an annual issue? Cotton bags, carrying your advertisements will be used over and over again, and remain handy and useful for years to come.
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US. He can be contacted at [email protected])

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COMMENTS

anantha ramdas

5 years ago

There is one other issue relating to this plastic bags that we all need to remember.

If one does not carry a cotton or jute bag when going for a shopping, they are penalized by the shop keeper. Yes, Reliance Fresh, Hopcoms and many others simply charge Rs 2 for a recyclable 40 micron thickness plastic bags!

Not only you pay for the mistake of not carrying your bag, but unwittingly act as the walking Advertisement Lamp post with the printed advertisement materials of the shop concerned!

And what is the actual cost of these bags? Not more than 25 paise a piece! The government has not thought it fit to put a
MRP for these bags!

Citizens are fleeced everywhere.

Siddharth Shriram Group exits Honda Siel; sells stake in for Rs180 crore

HSCI, which was incorporated in December 1995, will now be a 100% Honda subsidiary in India


New Delhi: Ending months of speculation, the Siddharth Shriram Group and Honda Motor have agreed to part ways from their join venture—Honda Siel Cars India (HSCI)—with the Indian partner selling its entire 3.16% stake to the Japanese partner for Rs180 crore, reports PTI.
 
In separate statements, Shriram-led Usha International and Honda Siel Cars India said UIL (Usha International) and Honda Motor (HMC) have signed an agreement to end the joint venture.
 
“UIL, which held 3.16% shares in HSCI, had shown an interest in divesting from the joint venture to be able to focus and strategically invest to expand their own core business. Therefore, based on the mutual consent, UIL has sold its shares to the partner Honda Motor Company, Japan,” HSCI said.
 
Following this, HSCI, which was incorporated in December 1995, will now be a 100% Honda subsidiary in India.
 
“The process of changing the company name and other formalities will be completed over the next few months,” the car maker said.
 
In its statement, UIL said Honda Motor has “purchased all of the shares (Rs18 crore) that Usha held in Honda Siel Cars India”.
 
The Indian entity further said the stake sale has been negotiated at a price of Rs100 per share, inclusive of a non-compete fee.
 
“According to the agreement with Honda Motor, Siddharth Shriram has ceased to be a director and the chairman in HSCI,” UIL said.
 
“Usha feels that it was inevitable that some day the parting would come because automobiles are not really Usha’s direct business,” it added.
 
While expressing ‘appreciation’ for the support of the Indian partner, HSCI president and chief executive officer Hironori Kanayama said, “We have shared a very successful and fruitful relationship with UIL over the past 17 years.”
 
For Honda, the break up of the joint venture is the second in as many years in the automobile sector after it had ended a 26-year old partnership with the Munjals-promoted Hero group in the erstwhile Hero Honda in December 2010.
 
UIL has had a relationship with the Japanese auto major since 1985 when Honda Siel Power Products (formerly known as Shriram Honda Power Equipment) was started. It became the partner of Honda, when it was looking to enter the Indian automotive market.
 
Of late, it was reported that Shriram was trying to exit the joint venture and was understood to have asked for a high price, reported to be around Rs100 per share.
 
Although it was sensed that Honda had not been willing to give in to the demand of the partner, finally, it bought out the stake from UIL at the said rate.
 
Siel had bought HSCI shares from Honda in September last year at a price of Rs52.80 a piece to increase its stake to 5% from 2.6% earlier.
 
In March 2012, Honda had subscribed to a rights issue of HSCI at Rs57.1 per share, in which Siel did not participate. Following this, Siel’s stake in HSCI came down to 3.16%.
 
Earlier, HSCI was planning to raise Rs3,200 crore to fund its expansion. Of this, Rs1,200 crore was mopped up through the rights issue.
 
HSCI, which makes models like City, Jazz, Brio, Civic and Accord, had partially inaugurated its second manufacturing facility at Tapukara in Rajasthan in September 2008.
 
The company had committed an investment of Rs1,000 crore to set up the facility at Tapukara with an installed capacity 60,000 units per annum.
 
In 2010, it had announced a further investment of Rs250 crore at the plant to expand the power train unit, mainly to cater to its small car Brio.
 
It currently rolls out engine and transmission components such as cylinder heads and cylinder blocks.
 
Earlier in 2010, HSCI had stated that it was likely to start car assembly operations at Tapukara from 2012. However, last year it had said the plant is expected to start rolling out vehicles within the next two-three years.
 
The company’s first facility at Greater Noida, set up for Rs450 crore in 1997, has an installed production capacity of one lakh units per annum and can produce up to 1.2 lakh units by improving the efficiencies of different verticals. 

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