The media darling has been wrong more often than right
Nouriel Roubini, chairman and...
Wall Street closed in the red overnight and the Asian markets were lower in early trade today, on concerns about the pace of economic recovery due to spiralling crude prices
The Indian share market is likely to see a tepid opening on unsupportive global cues. Markets in the US closed marginally lower on Wednesday concerns that the ongoing tensions in West Asia will hamper the economic recovery. Stocks of heavy industries, commodity-related industries and technology companies ended lower. Markets in Asia were in the red on global concerns and news that the Japanese economy fell at an annualised rate of 1.3% in the December quarter. The SGX Nifty was 22 points lower at 5,510 compared to its previous close of 5,532.
Back home, food inflation for the week ended 26th February will be released around noon today, giving some direction to the market later in the day. Food inflation for the week ended 19th February eased by a percentage point to 10.39%, mainly on a decline in vegetable and cereal prices.
The domestic market opened in positive terrain on Wednesday supported by strong Asian markets and on weaker oil prices. But choppy trade followed with the indices moving into the red in mid-morning trade. Feeble recovery attempts were thwarted by selling pressure, with the indices consolidating the gains of the last few trading sessions and ending almost flat.
The Sensex opened with a gap up of 83 points at 18,523 and the Nifty opened 22 points up at 5,542, on weaker oil prices. They hit intra-day highs early in the trading session, but soon witnessed a falling trend. The intra-day highs of the Sensex and Nifty were 18,583 and 5,563. By noon the indices hit their intra-day lows of 18,304 and 5,477, respectively. The market rose later in the day. By the end of the session the Sensex was up 30 points at 18,470, while the Nifty was 10 points up at 5,531.
Markets in the US closed marginally lower overnight as concerns that ongoing tensions in West Asia will impact economic growth weighed on investors’ sentiments. Crude remains the focal point as any spike in prices would have a cascading effect on the economy, analysts opined. Stocks of heavy industries, commodity-related industries and technology companies ended lower.
In economic news, wholesale inventories rose a more-than-expected 1.1% to a seasonally adjusted $436.88 billion in January, its highest level since November 2008.
The Dow shed 1.29 points (0.01%) to close at 12,213.09. The S&P 500 fell 1.80 points (0.14%) to end at 1,320.02 and the Nasdaq declined 14.05 points (0.51%) to close at 2,751.72.
Rising crude prices and a weak outlook of the Japanese economy in the December 2010 quarter led Asian markets lower in early trade on Thursday. Libyan forces carried out attacks on oil facilities in the country threatening supplies, which may hurt prices.
In economic news, Japan’s gross domestic product fell at an annualized 1.3% rate in the December quarter, more than the 1.1% contraction reported last month. The December quarter decline was more than analysts’ forecasts. Besides, the Bank of Korea raised the benchmark seven-day repurchase rate to 3% from 2.75%, for the second time this year after inflation exceeded its target ceiling for two consecutive months.
The Shanghai Composite declined 0.90%, the Hang Seng fell 0.33%, the Jakarta Composite was down 0.52%, the KLSE Composite fell 0.49%, the Nikkei 225 tanked 1.09%, the Straits Times shaved off 0.54%, the Seoul Composite declined 0.97% and the Taiwan Weighted was 0.93% lower in early trade.
Back home, finance minister Pranab Mukherjee yesterday gave an assurance that he will look into the demand of various industrial associations seeking withdrawal of the excise duty on bicycles, hosiery, blankets, garments, sewing machines and other industrial products.
The stock of Murli Industries, whose promoter was indicted recently by SEBI, is shooting up. Since 28th February, the share price has gained over 40%, indicating possible market manipulation
The promoter of Murli Industries was recently banned from trading, by the market regulator for involvement in price-rigging. Yet, the Murli Industries (MIL) stock price has recently seen an upward trend after sliding since November, suggesting that there is some manipulation.
Since 28 February 2011, till the time it was last traded, the share price has moved up from Rs26.35 to Rs37.05, a leap of over 40%.
On 7th March, when the BSE benchmark index, the Sensex, was down by 236 points, MIL climbed by Rs2.75, or nearly 10%. In three months from 25 November 2010, the stock price crashed from Rs111.20 crashed to Rs25.75 on 25 February 2011, a fall of 77%.
According to industry sources, last week the company's officials met bankers for the first round of corporate debt restructuring (CDR). This is said to be the main reason for the stock hitting the upper circuit over the past couple of days.
The company, which is into diversified businesses like power, cement, paper and paperboard and operates a solvent extraction refinery, reported a loss of around Rs97.20 crore for the December 2010 quarter.
Moneylife recently reported on possible accounting manipulation in Murli Industries. The interest cost for the third quarter stood at Rs52.48 crore, nearly double that in the earlier quarter when it was at Rs25.68crore. According to industry sources, the company has not taken on any new debt during this quarter. (Read, Murli Industries: A story of accounting malpractices?)
MIL made an ambitious foray into cement, but was weighed down by the debt that it ostensibly used to build up its production capacity. Now that it is selling off its cement business, the company will be able to concentrate more on its core businesses like solvent extraction, paper and power.
In November last year, there were various media reports which indicated that MIL was close to offloading its cement division to Mexico's Cemex, the world's third-largest cement maker.
A few months ago, SEBI banned the company and its promoter from trading in its own shares and the shares of group companies. MIL was one of the four companies where promoters had colluded with speculators to ramp up prices. The others were Ackruti City, Welspun Gujarat Stahl Rohren and Brushman India.