Nifty, Sensex in bear grip despite breaking 7-day losing streak

The markets are expected to be weak despite assurances from Raghuram Rajan and P Chidambaram as macro headwinds remain strong. A short rally may be met with increased selling

Stock markets fell for the second consecutive week. The BSE 30-share Sensex fell 266.73 points (or 1.29%) to close the week at 20,399.42, while the NSE Nifty closed at 6,056.15, down 84.60 points (or 1.38%). On Monday, the markets opened weak and stayed weak through the trading session, never breaching into green territory even once, underscoring bearishness seen since beginning of the previous week. The markets were affected by the news of the rupee slide as well as the reemergence of the ‘tapering’ theme. The Indian rupee fell 94 paise to an eight-week low, while the 10-year government bond yield crept up to its highest point since August, having crossed 9%  – signifying that it has become riskier to hold Indian government paper.

On Tuesday, Arvind Mayaram, the economic affairs secretary, has said that the finance ministry expects $25 billion of inflows by end of the year. But this failed to revive the markets. The downslide continued for the 6th day in a row. Markets opened in the green but the optimism did not last long. The weakness could be felt from the opening as it began to slide within an hour. Around noon, the markets dipped into the red and briefly recovered but soon fell off and continued the downward journey till trading session ended. In a measure to contain the rupee and deficit, the RBI had received $17.5 billion through a special window for swapping foreign currency non-resident (bank) deposits and overseas foreign currency borrowings by banks.

On Wednesday, the markets slid for the 7th consecutive day, prompting concerns about the rupee and economic recovery, especially food prices which will remain an election sticking point. Inflation data released on Tuesday made the markets weak as it continued to slide. Data released by the statistics office on Tuesday revealed the annual inflation rate for October 2013 is 10.09% as compared to 9.84% (final) for the previous month of September 2013. The corresponding provisional inflation rates for rural and urban areas for October 2013 are 10.11% and 10.20% respectively.

We had analysed what would happen to the markets on Thursday after the S&P BSE Sensex went down for seven consecutive days. The thorough analysis can be accessed here:

So did the markets move up on Thursday? Indeed, the markets broke its seven-day losing streak. The National Stock Exchange (NSE) recorded the rise on a lower volume of 52.69 crore shares. However, there was little conviction in today’s rally has the market fell later in the day below the opening level. Reserve Bank of India (RBI) governor, Raghuram Rajan, tried to assure on Wednesday that India will be able to fund current account deficit and would be able to deal with a global market sell-off. He also assured that he would move slowly if needed in winding down an oil window that provides dollars directly to state-run oil companies, while announcing a bond purchase of Rs80 billion on Monday to inject liquidity in markets.

The markets remained closed on Friday on account of Moharram.

Next week, Nifty may put in a small rally but may again head lower given strong macro headwinds.

Among the 1,279 shares that traded on the NSE this week, 426 rose, 817 fell and 36 remained unchanged.

Among the other indices on the NSE, the top two indices were Media (1%) and Auto (1%) while the top two losers were Realty (3%) and Energy (2%).

Among the Nifty stocks the top five gainers were Tata Steel (6%); Mahindra & Mahindra (5%); Dr. Reddy's Lab (2%); Cairn India (2%) and Maruti Suzuki (2%), while the top five losers were Asian Paints (-8%); Coal India (-6%); Gail (-6%); D L F (-5%) and Cipla (-5%).

Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors were:

Top Weekly Gainers


Top Weekly Losers




Real Estate


Industrial Intermediates












Telecom Services


Foods & Beverages




Chidambaram says most banks are ‘clones’ of each other

Banks in India offer similar products and services to customers and I would regret if new banking licences are given to similar cloned entities, the finance minister said

Finance minister P Chidambaram has called banks in the country as 'clone' of each other that offers similar products and services to customer. While speaking at BANCON 2013 in Mumbai, Chidambaram said there is no difference in most of the bank's approach in services and products.

"In January 2014 new banking licenses will be issued and I wish it would be given to banks with innovative or different models of banking. We need different kinds of banks to cater to different segments in our country. And I would regret if 'clone' banks are given new licences," the finance minister said.

At present, the Reserve Bank of India (RBI) is scrutinising 26 applications by private entities to run banks. This includes little known microfinance institutions (MFIs) as well as conglomerates like the Tatas, Birlas, Ambanis, Bajaj and Larsen & Toubro (L&T). Interestingly, when the banking licences were issued last time, only two out of 100 applicants were successful in 2003. Over the last two decades, the RBI licensed only 12 banks in the private sector, in two phases.

Calling bankers to focus on reality of India, Chidambaram said at present quality of service and innovative products are being used to serve small number of customers from big cities. He said "At the same time majority of the population do not have access to banking system. Access to banking is denied to those living in rural areas and only small percentage is able to use banking services."

"For most of the people from rural areas, it is either bank or moneylender; there is no other source of funding. Almost 70% of rural population have access to just 9% of the total credit provided by banks in India. This needs to be changed. Banks must cater to small and medium enterprises (SMEs) and small and individual borrowers from rural areas," Chidambaram said.

According to a paper submitted by McKinsey & Company, financial inclusion remains a concern in rural India even after significant efforts. "Rural India has around 60 million households that are financially excluded-constituting about 40% of the rural population. With only about 30,000 bank branches to cover more than 6 lakh villages, inadequate distribution has resulted in a large population of the rural population staying outside the fold of the formal banking sector," says the paper titled "Reimagining Banking in India: Gearing up to meet the new environment".

 Talking about increasing non-performing assets (NPAs) or bad loans in banks, Chidambaram said banks need to differential between a wilful defaulter and victims of circumstances. "Banks should be stern with wilful or habitual defaulters but hand hold victims of external circumstances," he said.

Assuring banks that all commercial decisions taken by them will be defended, the finance minister said most of the decisions are taken based on the circumstances and facts at that particular time, which may turn out to be poor or wrong decisions. However, such decisions may not have to be dishonest or malicious and the union government would stand by bankers who would have taken these decisions, he said.



MG Warrier

4 years ago

The FM has again given indications as to the norms that will be followed in selecting the winners from the 26 candidates for commencing banking business in the private sector makes things easy for the Jalan Committee and finally for the RBI Governor Dr Raghuram Rajan. Earlier FM had talked about 7 New Bank each with some unique features to avoid the look-alike syndrome, with a mandate to attempt to do different things and ‘do them differently and each following a different path. The present observations are in continuation. We cannot beg for more clarity. Much earlier, by declaring the take off of All Women’s Bank in public sector, FM has already shown how deadlines can be fixed and institutional structure can be defined, if there is a will.
Now, it is for the Jalan Committee to express their views on the future intitutional framework in the banking sector, based on the Committee’s perceptions on the material on 26 applicants furnished to it and for RBI to select the 7 from those eligible candidates which conform to the FM’s prescriptions.
Even if RBI is willing to go half way together, the clear indication from the FM is that the walk is going to be on parallel paths. The way things are moving, Rajan is too willing for such a contingency.

Suiketu Shah

4 years ago

Wise not to take his comments at all seriously.


4 years ago

Whoelse can better say that banks are clones. After all every weekend PSBs keep opening (cloning) branches in his constituency.

Amara Raja Batteries Q2 net profit up 35% on strong volumes

Amara Raja Batteries net profit was boosted by the automotive battery business, aided by volume expansion both in four- and two-wheeler segments

Amara Raja Batteries Ltd (Amara Raja), a Chennai based manufacturer of automotive batteries, in its quarter to end September posted 35% growth in its net profit on strong sales growth.

For the quarter to end September, Amara Raja said its net profit increased 35% at Rs94.58 crore from Rs70.10 crore a year ago period, while its net sales increased 13% at Rs804.72 crore from Rs716.15 crore, in a year ago period.

 “The automotive battery business reported double digit growth revenue, aided by strong volume expansion both in four-wheeler and two-wheeler batteries in the replacement market, while the original equipment manufacturer (OEM) demand continued to be sluggish. The trading volume in home uninterruptible power supply (UPS) business suffered due to unfavourable season on account of mild summer and good monsoon,” said Amara Raja in its press release.

“I am happy to note that our sustained good performance continues to be in line with our annual plan and expectations, despite slowing economy, volatile rupee and sluggish demand in the automotive and UPS and OEM sectors,” said Jayadev Galla, vice chairman and managing director, Amara Raja Batteries.

The promoters’ shareholding in the company remained at 52.06% as on 30 September 2013; foreign institutional investors (FIIs) share holding grew from 6.32% from same period last year to 11.08% as on 30 September 2013, an increase of 4.76 percentage points ; public shareholding fell 1.11 percentage points to 21.89%; domestic institutional investors (DIIs) shareholding fell 3.65 percentage points to14.97%.

“The industrial battery business has also reported double digit growth despite capacity constraints and subdued demand for UPS batteries. The company has substantially enhanced the quality of business through various initiatives in the market coupled with internal efficiencies to improve overall profitability. The company’s quick recharge series of telecom batteries (Powerstack) are gaining acceptance from all tower companies and operators enhancing demand. While the OEM demand in UPS sector is under stress, the preference for the company’s UPS batteries (Quanta) in replacement market is encouraging,” Amara Raja further stated in its press release.

On Thursday, share price of Amara Raja Batteries Ltd closed 1.11% up at Rs315.30 on the BSE, while the S&P BSE Sensex ended 205 points up at 20,399.

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