Indian stocks to see cautious start: Thursday Market Preview

Countries across the world are battling rising inflation at the cost of slowing growth

China’s central bank, after the markets closed yesterday, hiked interest rates by another 25 basis points in its ongoing move to rein in inflation. However, US markets closed marginally higher after a day’s pause, ignoring global worries and focusing on developments within the country. Markets in Asia were mixed in early trade on Thursday on concerns about economic growth in the region, and the world at large. The SGX Nifty was seven points higher at 5,643 compared to its previous close of 5,636 on Wednesday.

Back home, the government will announce the weekly food inflation numbers around noon. Food inflation fell to a one-and-a-half month low of 7.78% for the week ended 18th June down from 9.13% in the previous week.

Reflecting the mixed trend in the Asian markets, the domestic market also opened lower yesterday. The Nifty opened nine points lower at 5,623 and the Sensex resumed trade at 18,730, down 15 points from its previous close. PSU oil companies, banking, power and healthcare stocks were under pressure in early trade. Investors soon resorted to bargain hunting, taking the indices to their intra-day highs in the first half hour. At the day's high the Nifty rose to 5,655 and the Sensex touched 18,823.  
However, sharp volatility saw the indices bobbing in and out of the red on quite a few occasions. Rudderless trade led the market to the day's low in the post-noon session, when the Nifty lost 21 points to touch 5,611 and the Sensex fell to 18,683, down 62 points. A sharp recovery followed, lifting the market into the positive. However, the lower opening on key European markets made investors jittery in late trade and the market closed flat with a negative bias for the second day. The Nifty closed down seven points at 5,625 and the Sensex finished at 18,727, down 18 points.

The Nifty trailed close to its first support of 5,600 in trade. The market is trying hard to restrain itself from falling. If the Nifty closes below 5,600, its next support lies at 5,500.

US markets settled marginal gains, after settling mixed on Tuesday, Yesterday the Nasdaq closed higher for the seventh straight day. Moody’s downgrade of Portugal’s government bond rating to junk on Tuesday and China’s rate hike on Wednesday were the negative factors that influenced trade. Banks were among the worst performers on concerns about their exposure to euro-zone debt and sluggish US growth. Bank of America declined 2.4%, JP Morgan Chase fell 1.2% and Wells Fargo settled 1.1% lower.

In economic news, the Institute of Supply Management’s purchasing manager’s index for the non-manufacturing (services) sector declined in June to 53.3, from 54.6 in May.  The report follows a better-than-expected June ISM report on manufacturing.

The Dow rose 56.15 points (0.45%) to 12,626.02. The S&P 500 added 1.34 points (0.10%) at 1,339.22 and the Nasdaq gained 8.25 points (0.29%) to close at 2,834.02.

Markets in Asia were mixed in early trade on Thursday as the 25 basis point rate by the People’s Bank of China after the market closed yesterday worried investors that the move could jeopardise growth. The 0.25 percentage point increase in lending and borrowing rate, which comes into effect from today, is the third rate hike this year.

On the other hand, Japan’s core machinery orders rose 3% in May from the previous month. The rise in machinery orders was the biggest since a 4% increase in January.

The Hang Seng gained 0.28%, the Jakarta Composite rose 0.48%, the KLSE Composite added 0.02%, the Straits Times climbed 0.30% and the Seoul Composite advanced 0.26% on the other hand, the Shanghai Composite slipped 0.41%, the Nikkei 225 lost 0.10% and the Taiwan Weighted declined 0.51% in early trade.

Oil prices settled almost unchanged on Wednesday as the rate hike by China and Europe’s debt woes raised concerns about demand. Brent futures for August added 1 cent to settle at $113.62 a barrel, having recovered from an earlier $111.91 low. US crude fell 24 cents to settle at $96.65 a barrel, having bounced off a $95.90 intra-day low.

Back home, A government panel on Wednesday deferred decision on UK-based Vodafone’s plea to buy 5.48% stake in telecom company Vodafone-Essar for about Rs2,700 crore for want of comments from home and telecom ministries.

Mauritius based Prime Metals, an indirect subsidiary of Vodafone International, had moved an application before the FIPB for permission to buy about 5.48% stake in the Vodafone-Essar. The home ministry and telecom ministry are yet to make any comment on Prime Metals plea. Prime Metals already holds about 1.53% stake in Vodafone-Essar.


National Institute of Virology warns HUL of legal action on false claims for water purifier

Directs company to change TV commercial which says ‘Pureit’ can destroy one crore viruses in one litre of water and that this is confirmed by tests by NIV

Pune-based National Institute of Virology (NIV) has warned Hindustan Unilever Limited (HUL) of legal action if it does not change the television commercial of its 'Pureit' water purifier. The advertisement is said to make unsubstantiated claims that it can destroy one crore virus in one litre of water.

In a letter to HUL dated 2 June 2011, A C Mishra, the director of NIV, explained the details of the tests conducted by the institute and said, "Your (HUL's) advertisements are not based on facts. You are requested to refrain from twisting and misrepresenting the facts. Failing to take immediate corrective measures may force us to resort to legal action against your company."

Moneylife had on 6 June 2011 reported the details of this case that were revealed through a Right to Information (RTI) query by Mumbai-based activist A R Shenoy. Pureit has been making the unsubstantiated claims through advertisements stating that the test results were backed by NIV, which tested eight domestic water purifiers using 0.67x105 Hepatitis E virus particles per litre of water.
According to the reply from NIV to the RTI application, the test was conducted on a sample of water of 0.67x105 Hepatitis E virus particles per litre and not one crore virus, as claimed by HUL. (Read, "How safe is your water purifier? HUL makes exaggerated claims")

 The report does not mention the names of any of the other water purifiers that were tested, apart from Pureit, which it says, removes 99.9% of virus particles using 0.67x105 Hepatitis E virus particles per litre of water, which is less than one million virus particles. Therefore, HUL took the liberty to twist the facts for its own benefit.

Subsequently, Mr Shenoy again evoked the RTI to find out from NIV whether there was any communication or official letter to HUL between April and early June 2011. In reply, to Mr Shenoy's query, NIV sent him a copy of the letter sent by its director, Mr Mishra, to HUL on 2nd June.

Speaking to Moneylife, Mr Shenoy said, "The letter is in agreement with my findings that the company is twisting the test reports for their own advantage." HUL has not answered an e-mail from Moneylife yet.




5 years ago

There are many low cholesterol oils in the market.

I am sure you must have heard of these oils too.

The fact is that no vegetable product has cholesterol and still companies advertise that their oils have lower cholesterol than other oils in the market.


Sachin Purohit

In Reply to Sachin 5 years ago

They are talking about the nature of cholestrol carriers in their oil. The formal medical terminologies are not understood by the masses. Vegetable oils don't have any cholestrol. So for vegetarians, the only cholestrol is the what the liver produces naturally. This cholestrol is transported to various parts of the body by lipoproteins. The low-density lipo-proteins (LDL) do not carry this cholestrol efficiently. HDL, on the other hand does it in a more clean way. Thus, you need more of HDL (called in common man's terms as Good Cholestrol) and less LDL (bad cholestrol). These two exist in foods that we eat - both vegetarian as well as non-vegetarian. The good oils (generally having higher proportion of unsaturated fats) have more of HDL and the bad oils (with more saturated fats) have more of LDL. Though they don't have any cholestrol of their own, in an ad consisting of less than a minute, you can't expect them to convey this entire scientific stuff to the target audience. So they just talk in terms of good cholestrol and bad. Don't be under the false assumption that vegetable products have no cholestrol and hence are heart-safe! They are not. You have to make a choice amongst the fats that you consume.

2G scam: Dayanidhi Maran comes under SC scanner

The CBI said that Malaysian firm Maxis was favoured by former telecom minister Dayanidhi Maran and was granted licence within six months after taking over the Aircel in December 2006. Mr Maran was the telecom minister between February 2004 and May 2007

New Delhi: Union textile minister Dayanidhi Maran has come under the Supreme Court's scanner in the second generation (2G) spectrum allocation scam with the Central Bureau of Investigation (CBI) raking up his role in 'forcing' a Chennai-based telecom promoter to sell his stakes in Aircel to a Malaysian firm in 2006, reports PTI.

The agency, which placed its 71-page fresh status report about the 2G scam, said that during 2004-07 when Mr Maran was telecom Minister, the promoter C Sivasankaran, was forced to sell the stake in Aircel to a Malaysian firm Maxis Group.

Senior advocate KK Venugopal, who read the status report before a bench of justice GS Singhvi and AK Ganguly, did not take Mr Maran's name but stated that the Chennai businessman was not granted UAS licence for two years.

It said that the Malaysian firm was favoured by Mr Maran and was granted licence within six months after taking over the Aircel in December 2006. Mr Maran was the telecom minister between February 2004 and May 2007.

"The gentleman (promoter of Aircel) had been knocking at various doors but was left with no choice but to sell his shares to a Malaysian form," said Mr Venugopal, representing the CBI, while reading out from the status report that was filed in a sealed cover.

Earlier, an NGO, Centre for Public Interest Litigation, had placed documents before the apex court showing the alleged role of Mr Maran in favouring Maxis group of Malaysia which had bought Chennai-based telecom company, Aircel, owned by Siva Group, when he was telecom minister from 2004 to 2007.

CPIL had alleged that Mr Maran, who is now Union textile minister, had during his tenure as telecom minister granted 14 licences to Aircel which invested Rs599.01 crore in his family-owned business.

Later, he allegedly delayed the award of UAS licenses to Aircel which had been applying with the Department of Communications (DoT) since 2004 by raising irrelevant issues from time to time ignoring the request of its owner C Sivasankaran to resolve them, following which he sold the company to Maxis group owned by Malaysian business tycoon T Ananda Krishnan.

Mr Sivasankaran had appeared before the CBI last month and had recorded his statement.

The NGO claimed that after Aircel was taken over by the Maxis, Mr Maran's family-owned business, Sun TV, received substantial investment from Maxis Group (Aircel) by taking 20% equity in Sun Direct.

"Feeling harassed, Mr Sivasankaran was forced into selling Aircel. In March 2006, Maxis bought 74% stake in Aircel. The company got the Foreign Investment Promotion Board (FIPB) approval in May 2006. As on 3 March 2006, a total of 14 applications from Aircel were pending in the DoT for award of licenses," the NGO had said.

During the hearing, Mr Venugopal told the court that the CBI is to complete its probe into the money trail, involving the 2G spectrum allocation scam, by 31st August.

He also added that the probe into all the irregularities in the spectrum allocation during 2001-08 will be completed within 3 months by 30th September.

The bench slated 11th July as the next date of hearing.


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