Nifty, Sensex have turned directionless – Friday closing report

Nifty may rally if closes above  7890


We had mentioned in Thursday closing report that rally on Nifty may continue if it manages to stay above 7,920. The index opened below this level and moved in a narrow range. In line with negative performance of the US indices on Thursday and the weakness on the Asian bourses, indices back home were also pulled lower.

S&P BSE Sensex opened lower at 26,552 while Nifty opened at 7,911. After hitting a high almost at the same level as opening the benchmark continue to move lower. The indices hit a low at 26,262 and 7,848. Sensex closed at 26,297 (down 340 points or 1.28%) while Nifty closed at 7,860 (down 101 points or 1.26%). The NSE recorded a volume of 76.14 crore shares. India VIX rose 8.93% to close at 14.3300.

Market awaited Infosys to declare its Q2 results today and the government will unveil industrial production data for August 2014.

Aban Offshore (9.43%) was among the top two gainers in ‘A’ group on the BSE. It received two firm orders worth USD 91.33 million worth each from ONGC for the deployment of jack-up rig Aban III and Aban IV for a period of 3 years. The contracts are expected to commence during the first quarter of calendar year 2015.

JSW Steel (5.87%) was among the top three losers in ‘A’ group on the BSE. It recorded crude steel production at 3.30 million tons for Q2 FY 2014-15 showing a growth of 11% over the corresponding quarter of the previous year. Flat rolled products at 2.61 million tons and long rolled products at 0.56 million tons registering growth of 6% and 21% respectively over the relevant period.

Infosys (6.68%) was among the top three gainers in ‘A’ group on the BSE and the top gainer in Sensex 30 pack. It posted a net profit for the period after exceptional item of Rs 3,365 crore for the quarter ended September 2014 as compared to Rs 2,326 crore for the quarter ended September 2013. Revenue has increased from Rs 11,482 crore to Rs 11,863 crore for the relevant period. With a view to increase liquidity its board has recommended a bonus issue of one equity share for every equity share held.


Mr. Narayana Murthy and S Gopalakrishnan will cease to be Non-Executive Chairman effective October 10, 2014 and KV Kamath has been elected as the chairman of the board effective October 11, 2014. Its board also declared interim dividend of Rs 30 per equity share.

World Steel Association recently mentioned that India's outlook is improving following the election of a new government. In 2014, India's steel demand is expected to grow by 3.4 per cent to 76.2 million tonnes in 2014, following a growth of 1.8 per cent in 2013.Tata Steel (4.03%) was among the top four losers in Sensex 30 stock.
US indices closed in the red on Thursday.

Federal Reserve officials said the US economy may be at risk from a global slowdown as the International Monetary Fund this week cut its outlook for global growth.
All the Asian indices which were trading today closed in the red today. Hang Seng (1.90%) was the top loser.

In Japan, minutes from a central bank meeting showed that one board member warned of possible negative effects of additional stimulus. The comment indicated that not all board members were comfortable with aggressively easing policy further.

European indices were trading lower so were the US indices trading deeply in the red.
Germany, reported on Thursday that its exports fell 5.8% in August, the worst decline since January 2009.

The Bank of England (BOE) voted on Thursday to keep its main interest rate at a record-low level of 0.50%, with Britain experiencing low inflation and steady economic recovery. The central bank's nine-strong monetary policy committee opted also to maintain the level of its cash stimulus, or quantitative easing, at £375 billion ($608 billion, €476 billion), the BoE said in a statement issued following a regular monthly meeting.

Differences between the European Central Bank (ECB) and Germany over the steps needed to revive the euro-area economy came to the fore yesterday, 9 October 2014.


Speaking in Washington, ECB President Mario Draghi pledged to keep monetary policy loose and urged those governments with the room to ease fiscal policy to do so. By contrast, German Finance Minister Wolfgang Schaeuble warned against US-style quantitative easing and urged continued budgetary discipline. Draghi said there are signs the region's recovery is losing momentum.


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Which Came First, the Chicken or the Horse?
The law sides with the injured and against the negligent
There was a time during the 1940s, when a chicken cost Rs2 and annas 12. That is Rs2.75. So what would you say if someone paid Rs100? That too for a dead chicken!
A story went around the school (St. Xavier’s) that a king (of a country called Arabia) was driving down Mohammed Ali Road and accidentally knocked over a chick, the feathered variety. He immediately paid the owner 40 times the worth. The boys were aghast.
Sixty-five years later, an accident involving a chicken fetches $7,500,500. Seven and a half million US dollars! This time no king was involved. And the chicken lived.
There once was a race track. On it practised mounted jockeys. And the horse and jockey were on their routine ride. And it came to pass that a chicken got in their way.  And the horse, Cassidy Blue, was a bit yellow-livered. And, being not too brave, it reared up. And the jockey was thrown from his saddle. And the rider got his foot caught in the stirrup. And the horse kicked and kicked. And the jockey was injured and close to death.
And he died within hours of reaching the hospital.
You be the judge.
Who paid the seven and a half million?
Moneylife readers will remember the story of the horse biting the kid. Duty of care. Negligence. Precautions not taken. The ‘reasonable man’ standard being applied. In this case, the horse was where it was supposed to be. The jockey was doing his job. The chicken was the trespasser. So who pays?
The track people denied all responsibility. After all, the chicken was not theirs. Unfortunately, when chickens come home to roost, all hell breaks loose.
The Philadelphia Court of Common Pleas Judge, Albert J Snite, recognised that the track-owner’s “… arguments were without merit. There was overwhelming evidence to support the verdict for punitive damages” and that Parx, the track’s management, knew about the chickens on the track, but failed to act. Therein lies the rationale behind the judgement.
Chickens, considered ‘wild birds’, were running onto the track. Another jockey had an accident previously—five months earlier—and had reported the hazard. The management had maintained that they had no control over the intruders.
The instant case relied heavily on the testimony of the other jockey and photographs. The Laws of Evidence came into play, to a great extent. The track management rejected the post-accident video evidence and claimed that such grandstanding prejudiced the minds of the jurymen.
“The videotape recordings and still photographs were relevant to assist the jury in understanding that chickens could make their way to this racetrack surface,” Snite said. “At the same time the court took great care to prevent the jury from improperly using the material by twice instructing them how the material was to be considered.” The judge had second-guessed the defendants. The trial lasted eight days and the jury deemed Parx negligent and found, for the jockey’s widow who was awarded $2.3 million for wrongful death, $500,000 under the Survival Act and $5 million in punitive damages. Another $88,000 in delay damages were added on.
America’s love affair with horses leads to many a story. The law sides with the injured and against the negligent. However, one wonders, if the first incident, the non-lethal one, had not occurred, would the verdict have been different? Was the judgement representing a fact that a warning had gone unheeded? This author thinks so. Of course, the damages would still have figured in the order, but, maybe, they would have been less. After all, not all hazards are visible, until they happen. 
Bapoo Malcolm is a practising lawyer in Mumbai


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