Stocks
Nifty, Sensex headed lower – Tuesday closing report
Nifty decline will end only if it goes above 7,860
 
We had mentioned in Monday’s closing report that Nifty, Sensex are headed lower and that Monday could be the start of a several days of decline. The major indices in the Indian stock markets were moving sideways in Tuesday’s trading and closed with losses. The day’s trends of the major indices in the markets are given in the table below:
 
Negative global cues, coupled with disappointing macro-data, subdued Indian equity markets on Tuesday. This led the Indian equity markets provisionally closing the day's trade in the red a day after it plunged to a new four-month low. Initially, the bellwether indices opened on a firm note in sync with their Asian peers. However, they soon receded on the back of negative international cues from the US, rising geo-political tensions in the Middle East and disappointing macro-data. Besides, investors were seen cautious regarding the upcoming macro-data on industrial output, retail inflation and the third-quarter earnings results which start from January 14. Nevertheless, some value buying and mildly positive Asian markets soothed investors' nerves.
 
Chinese stocks closed lower on Tuesday, with the benchmark Shanghai Composite Index down 0.26%, at 3,287.71 points. The smaller Shenzhen index lost 1.36% to close at 11,468.06 points, Xinhua reported. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, dropped 2.99% to close at 2,416.73 points.
 
Japan stocks closed lower on Tuesday in choppy trade as the indices switched between positive and negative, with a further drop in Chinese shares and concerns about escalating tensions in the Middle East eventually pushing investors into a risk-off mood. The 225-issue Nikkei Stock Average lost 0.42%, from Monday at 18,374.00, Xinhua reported. The broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 0.33%, to close the day at 1,504.71. 
 
Economic activity of the US manufacturing sector in December contracted further, as the impact of a strong dollar continue to play out. The manufacturing index, also known as the purchasing managers index (PMI), fell to 48.2 in December, the lowest since June 2009, after registering 48.9 in November, Xinhua cited the Institute for Supply Management (ISM) as saying on Monday. A reading above 50 indicates the sector is generally expanding, while a reading below that level indicates contraction. Contraction in new orders, employment and raw materials inventories accounted for the overall softness in December, said the ISM. The ISM's new-orders index rose 0.3% from the previous month to 49.8 in December, while the employment index dropped 3.2% to 48.1. The dismal data show that the strong US dollar and a weak global economy continue constraining factory activities. Of the 18 manufacturing industries, only six reported growth which included printing, textile mills, paper products, miscellaneous manufacturing, chemical products, as well as food, beverage and tobacco products.
 
The central parity rate of the Chinese currency, renminbi (yuan) weakened by 137 basis points to 6.5169 against the US dollar on Tuesday, according to the China Foreign Exchange Trading System. The yuan hit its lowest level in more than four years in both onshore and offshore trade on Monday, as bad news about the country's manufacturing activity unnerved investors, Xinhua reported. The Caixin General China Manufacturing Purchasing Managers' Index (PMI), an indicator of manufacturing activity, edged down to 48.2 in December from November's 48.6%. The reading was the lowest since September. A reading above 50 indicates expansion, while a reading below 50 represents contraction. The yuan has largely been trending down since China's central bank revamped its foreign exchange mechanism last August to make the currency more market-based. The yuan has been losing ground as the Chinese economy hit its slowest pace in a quarter century due to outstanding issues such as housing overhang and excess capacity. Meanwhile, the US raised its interest rates in December and more hikes are expected in 2016. The PBOC said in August that there is no basis for steady depreciation of the yuan.
 
The US stocks slumped on Monday, the first trading day of 2016, as heavy sell-offs in global markets and geopolitical tensions between Iran and Saudi Arabia rattled nervous investors. The Dow Jones Industrial Average tumbled 276.09 points, or 1.58%, to 17,148.94. The S&P 500 dropped 31.28 points, or 1.53%, to 2,012.66. The Nasdaq Composite Index shed 104.32 points, or 2.08%, to 4,903.09. European equities also suffered big losses following Asian stocks' sharp decline Monday, with Germany's benchmark DAX index at Frankfurt Stock Exchange diving 4.28%. Meanwhile, Saudi Arabia cut off diplomatic ties with Iran over the weekend and asked all Iranian diplomats to leave the country within 48 hours. Analysts said the heightened geopolitical tensions in the Middle East sent traders scurrying from stocks to safe haven assets. On the economic front, the U.S. December ISM Manufacturing Index moved down from November's 48.6 to 48.2, missing market expectations of 49.2, said the Institute Supply Management Monday. The US construction spending data also came out disappointing. The Commerce Department announced on Monday that construction spending during November 2015 was estimated at a seasonally adjusted annual rate of $1,122.5 billion, 0.4% below the revised October estimate.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of major Asian indices are given in the table below:
 
 

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Reliance to take on Uber, Ola by March?
RIL appears to be entering into private taxi service business to compete with Uber and Ola using CNG-fitted cars to keep its costs down 
 
Updated on 6 January 2016 at 6.05pm to include reply from RIL official
 
Mukesh Ambani-led Reliance Industries Ltd (RIL) is apparently planning to enter into the business of technology-based cab service providers, to compete with Uber and Ola, say cab drivers who have been approached. However, RIL officials said the information is not true.
 
In an email reply, an official from RIL said, "This wrong and untrue information about Reliance entering Private Taxi Service is not new and has been making rounds of social media for over 18 months."
 
According to our information, RIL is planning to start its taxi services by March and has already bought about 2,000 cars (Toyota Etios) in Kolkata alone. All these cars will be fitted with 4G connection (RIL Jio) and use compressed natural gas (CNG) from RIL’s own fuel stations for refilling. On an average, the cost for running a diesel car comes to over Rs6 per km. However, with CNG, the cost comes down to below Rs4 per km, offering Reliance a huge competitive advantage, which would help it wean away the owners from Uber and Ola.
 
The company would use its own fuel stations to supply CNG to its taxi fleet. RIL, over the past few months has been re-opening its fuel stations that were launched with great fanfare in the mid-2000 and then shut down due to adverse fuel pricing regime. In March 2008, RIL shut down all of its 1,432 petrol pumps due to huge losses incurred while trying to match with prices offered by state-owned oil marketing companies. Later, the central government, in October 2014, deregulated diesel pricing, which made RIL to re-open its outlets. 
 
Uber changes business model
If Reliance does enter the business, it will come at an awkward time for Uber and Ola. According to Uber drivers, the company has sharply scaled down its incentives that it was freely offering in the initial months. In fact, Uber has changed its business model, according to informed sources. Earlier it used to offer a fixed amount for the duration the car app was kept on. The fixed amount is almost gone and it is now sharing just the commission with its owners, and that too depending upon when the ride was taken. During the peak hours, the commission for owners may go up to as high as 60%, while during the afternoon, it may be zero. On an average, the commission earned by owners of Uber is about 40% now in some parts. Many owners who do not drive their own cars are finding it unsustainable because they would have to pay the drivers out of this money. Only owner-drivers would continue to do well under the new model.
 
Private taxi service has created huge employment opportunity for unemployed drivers, who on an average were earning Rs25,000 a month while cab owners were earning up to Rs1 lakh a month. However, with Uber changing the business model, the fun is over. 
 
About four months ago there were quite a few rumours in the social media that RIL’s taxi service is about to be launched soon. However, Reliance has failed to meet deadlines for a number of its services in retailing, finance, Jio telecom services. Whether it can launch a cab service remains to be seen. Also, it is unclear whether RIL has any sustainable competitive advantage against Uber and Ola.
COMMENTS

Kumar Anurag

10 months ago

hope reliance guys call me for the same.

Kumar Anurag

10 months ago

I am much interested to listen this news. wants offer my self to this company.

Ashok Kumar

10 months ago

Im ridy to work with reliance cabs....in Delhi ncr

Ashwani Arora

10 months ago

I m ready to work with reliance cabs..in Delhi ncr

mahesh haryan

11 months ago

we ready to welcome in Mumbai.. please come soon in Mumbai.

Surender Tandy

12 months ago

im am intrested in drive with relince cab

Prakash Bps

1 year ago

Reliance client app download 26th onwards below ling :
https://drive.google.com/open?id=0B7YBXCl3SOOLanZCR0RPMEVYUEU

Prakash Bps

1 year ago

Reliance Taxi
Driver app link download 26th anwords ,we will aprol:
https://drive.google.com/open?id=0B7YBXCl3SOOLS0FjU0dRUGI3ZFk

REPLY

[email protected]

In Reply to Prakash Bps 1 year ago

Hi Sir

I'm current working in Ola Cabs i need an opportunity for work with new cab company like Reliance Cab so pls..... any update Regarding job in delhi city pls... send me update my Email ID is [email protected]

Fairy gada

1 year ago

I havent even tried using Ola and Uber. After March, if Reliance is behind the wheels, I'll never be able to sit in these cabs. (coz i will not want to).

Meenal Mamdani

1 year ago

Reliance has two advantages over others. One, it has deep pockets so can sustain losses for a long time. Two, it has its own CNG filling stations so cars do not waste time in lining up to get CNG at public stations.

I am apprehensive about Reliance entering the public transport market. It is not known for business ethics and it will try to eliminate competition unfairly.

Railways to invite bids for modernising 400 stations: Jaitley
New Delhi : Indian Raliways will soon invite bids from private players for the modernisation of 400 railway stations across the country, Finance Minister Arun Jaitley said on Tuesday.
 
"Very shortly, the railways is going to come up with its proposed bids for the development of 400 stations in the country," he said at a foundation day function of India Infrastructure Finance Company.
 
"The railways have now come on to the right track. They are inviting the private sector, including foreign investments, in infrastructure. GE and Alstom have agreed to make major investments in Bihar," the minister said.
 
"The railways have issued tax free bonds, have recently managed big financing from LIC (Life Insurance Corporation of India), besides foreign investments," he said regarding the railways efforts in attracting infrastructure investment.
 
Jaitley stressed that public investment has to lead the way in tackling global slowdown's impact, and added that a lot of resources were put into national highways, rural roads and railways during 2015.
 
"The result is visible now, that the stalled highway projects have got moving. As a result of increased public investment, even private sector players who got bogged down in their disputes have re-entered the field," he said.
 
The minister also said state-run ports sector needs to be overhauled and moved towards privatisation.
 
"The structure of state sector ports needs a rethink, moving towards privatisation of state-run trust ports," Jaitley said.
 
"If major ports don't overhaul their structures, they will seriously fall behind in competition with minor ports," the minister said.
 
He said the National Investment and Infrastructure Fund (NIIF) was already in place, and it was in touch with many sovereign and pension funds that had shown interest in investing in the sector.
 
Following the first meeting of the NIIF here last week, Jaitley, who heads the NIIF Governing Council, told reporters that the progress with regard to the proposals of sovereign funds from the United Arab Emirates, Britain, Russia and Singapore were particularly discussed.
 
While the government will contribute Rs.20,000 crore to the fund, another amount of Rs.20,000 crore is expected to come from private investors.
 
The union cabinet in July approved the creation of the NIIF with a corpus of Rs.20,000 crore for development of infrastructure projects, including the stalled ones.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Jagan Jrk

3 weeks ago

I am Ready reliance Call taxi driver job please open company

ARUP DUTTA

2 months ago

I'm ready taxi driver job
please joning To me

Meet Arora

4 months ago

I m waiting for ur service in ludhiana pls come asap

Pawan Chauhan

5 months ago

i want to attach my new car with reliance how is it possible
plz tell me the complete information.
[email protected]
9716698127
regards
pawan

stuart d'douze

5 months ago

I'm current working in Ola Cabs i need an opportunity for work with new cab company like Reliance Cab so pls..... any update Regarding job in mumbai city

stuart d'douze

5 months ago

I'm current working in Ola Cabs i need an opportunity for work with new cab company like Reliance Cab so pls..... any update Regarding job in mumbai city

prateek mathur

8 months ago

Im ridy to work with reliance cabs....in Delhi

prateek mathur

8 months ago

Im ridy to work with reliance cabs....in Delhi

uma sankar yadav

9 months ago

I am interested to driving reliance cab.

uma sankar yadav

9 months ago

I am interested to driving reliance cab.

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