Nifty may head to 5,170 if it holds above today’s high
Despite a flat opening, the market picked up momentum in the late morning session on across-the-board institutional buying and settled in the positive for the third day in a row. Today the Nifty rose 113 points on a volume of 55.06 crore shares on the National Stock Exchange (NSE), the lowest in the past four days. From here we may see the index moving to the level of 5,170 if sustains above today’s high. On the other hand, if the index is not able to maintain this rising trend, we may see it falling to around the level of 4,900.
The market opened flat this morning as economic indicators pointed to a slowdown in the domestic economy amid global uncertainty. Also, pressure in the Asian markets in morning trade weighed on investor sentiments. The Nifty opened four points higher at 4,941 and the Sensex started the day at 16,494, up 11 points over its previous close. Profit booking following two days of gains soon led the benchmarks into the red and down to the day’s lows. At the lows, the Nifty touched 4,918 and the Sensex went back to 16,429.
However, a steady pace of buying lifted the benchmarks into positive terrain in late morning trade. The upmove continued in subsequent trade supported by firm opening of the key European bourses and US stock futures trading in the positive.
The market hit its intraday high towards the end of the trading session with the Nifty crossing the 5,000 mark at 5,063 and the Sensex climbing to 16,888. The indices closed marginally off those levels, making it a third consecutive close in the positive. The Nifty gained 113 points to settle at 5,050 and the Sensex ended trade at 16,847, up 363 points.
The advance-decline ratio on the NSE was in favour of the gainers at 1158:479.
Among the broader indices, the BSE Mid-cap index climbed 1.43% and the BSE Small-cap index rose 1.08%.
All sectoral gauges settled higher with the BSE Bankex emerging as the leader (up 3.26%). It was followed by BSE Poser (up 3.04%); BSE Metal (up 2.49%); BSE TECk (up 2.44%) and BSE IT (up 2.30%).
Hero MotoCorp (down 0.30%) was the lone loser on the Sensex today. The top gainers were Tata Power (up 6.30%); Tata Motors (up 4.57%); Tata Steel (up 4.04%); Sterlite Industries (up 3.79%) and State Bank of India (up 3.70%).
The major gainers on the Nifty were Ambuja Cements (up 8.10%); Tata Power (up 6.51%); BPCL (up 5.48%); IDFC (up 5.08%) and Tata Motors (up 4.81%). Hero MotoCorp (down 0.52%) and Ranbaxy Laboratories (down 0.26%) were the only losers on the index.
Markets in Asia closed mixed ahead of the US monthly payroll report and the European summit next week, where a detailed plan to resolve the debt crisis would be discussed.
This apart, China’s purchasing managers; index (PMI) tumbled to 49 from 50.4 in October, the lowest since February 2009.
The Hang Seng added 0.20%; the KLSE Composite rose 0.25%; the Nikkei 225 gained 0.54% and the Straits Times climbed 0.42%. On the other hand, the Shanghai Composite declined 1.10%; the Jakarta Composite lost 0.03%; the Seoul Composite shed 0.01% and the Taiwan Weighted fell by 0.53%.
Back home, foreign institutional investors were net buyers of equities totalling Rs687.26 crore on Thursday while domestic institutional investors were net sellers of stocks amounting to Rs713.08 crore.
Supreme Infrastructure has bagged two new road BOT projects—Jaipur Ring Road and Patiala Malerkotla Road—in addition to a project in the buildings vertical. The total value of the three projects is Rs1,248 crore. The stock gained 2% to close at Rs184 on the NSE.
Torrent Pharmaceuticals has received an approval of US Food and Drug Administration (USFDA) for its generic version of AstraZeneca’s hypertension drug Plendil. The approval is for 2.5 mg, 5 mg and 10 mg strengths of Felodipine extended release tablets to be sold on prescription basis. Felodipine is a calcium channel blocker (calcium antagonist), a drug used to control high blood pressure. Torrent Pharma rose 0.67% to close at Rs560 on the NSE.
Private sector lender Axis Bank on Thursday said it would raise Rs1,500 crore through bonds to fund its business growth. The board has passed a resolution approving allotment of unsecured redeemable non-convertible subordinated debentures on private placement basis as the bank’s Lower Tier II capital aggregating to Rs1,500 crore (including green shoe option of Rs500 crore). The stock rose 3.98% to settle at Rs1,011.30 on the NSE.
The black and yellow cabs are threatening to go on strike thinking that the space allocated to them free of charge by Mumbai Airport authorities would remain with them forever
Once again, an errant taxi union has threatened with a strike call, holding the city for ransom, if the private or long distance taxis are allowed to operate from the pre paid taxi booth at the Mumbai airport. Considering the huge number of black-and-yellow taxis and cool cabs, around 1,700 of them, operating with free parking space, transport activist have lambasted the demand of the union.
Ashok Datar, a transport expert told Moneylife that, “At whose cost do these taxis operate? They have free parking space through which they are occupying large area. Such a demand of theirs (the taxi union) is outrageous.”
Interestingly, these long distance taxis were given permission to operate from the space allocated to pre-paid cabbies. For instance, Mumbai Metropolitan Regional Transport Authority (MMRDA) had given them permission to operate the Mumbai-Pune taxi service from the domestic airport.
AL Quadros, leader, Mumbai Taximen's Union was quoted saying in national daily that “We are not against their services. Let them operate, but they shouldn't function from the prepaid taxi stand as it will hamper our business. The authorities should make a separate stand for them.”
However, experts say that the taxi union, in reality, is against any other cab service.
“This is pure dadagiri of the taxi unions. They just don’t want anyone else to come. If they want to, they can go on strike, but can’t stop anyone else to operate. This is not how free market works. Assuming that area is allotted by the Mumbai Airport authorities (MIAL) to taxi parking, it definitely cannot be only for yellow-and black or long distance. It would be for everyone,” says Jagdeep Desai, a Mumbai-based transport expert.
Activist point out that the number of taxis parked in the allocated space are way higher than actual requirement. “Statistics show that only 600 taxis are required on hourly basis during the peak hours. They just unnecessarily park their cabs and occupy the space. By making such threats, they are actually inviting government to start a public transport to the airport. Let them go on strike,” says Sudhir Badami, expert on transportation.
This is evident from the fact that taxi drivers claim they have been in queue for 10 to 11 hours. Activists wonder what is their business model, if it entails 10-12 hours in queue. Isn’t this possible only if they overcharge customers?
According to Mr Datar, a study should be conducted to ascertain the requirement of taxies by destinations per hour at both the terminals and then the space should be allowed for different type of services such as to Pune, to Nasik , or within the city. So that pooling of taxies in orderliness would be good for the taxis, passengers and the airport authorities.
LIC Nomura MF plans to launch a mid-cap fund. Though the timing may be right, as we may be close to a market bottom now, the fund management of LIC Nomura MF has been rather substandard in the past
Recently Union KBC filed an offer document with the Securities and Exchange Board of India (SEBI) to launch a small and mid-cap fund. And now, LIC Nomura MF, too, has filed its offer document with SEBI to launch a mid-cap fund. The scheme would invest 65%-100% in equities of companies having a minimum market capitalization of Rs750 crore and maximum market capitalization not exceeding the highest market capitalization of the BSE Mid-cap index constituents. The remaining would be invested in debt and money market instruments.
A couple of days back we wrote about the pros and cons of investing in small and mid-cap funds and the risks associated with such funds (Read: Union KBC Small and mid-cap fund: Is it worth the risk?). To reap the benefits of such funds your timing needs to be perfect. And the best time to buy is when the market is at its bottom. But is it safe to invest in such a fund from LIC Nomura MF?
On analysing the returns of equity funds of LIC Nomura over one year, three year and five year periods it turns out that out of the five funds of LIC only one has been able to beat the benchmark. That, too, only in a single period. Take a look at the table below.
The fund management of LIC Nomura has simply failed to perform. Managing a portfolio of highly risky stocks will be a tough challenge for them. Clearly, LIC Nomura MF Mid-cap Fund may not be a safe and smart investment to put your money into.