Stocks
Nifty, Sensex looking weak – Thursday closing report

We had mentioned in Wednesday’s closing report that Nifty, Sensex were still trendless. The major indices of the Indian stock markets suffered a correction on Thursday and closed with losses around 0.75% over Wednesday’s close. NSE trading volumes were high, indicating a broad-based correction from the point of view of investors. The trends of the major indices in the course of Thursday’s trading are given in the table below:

 

The markets were subdued during the mid-afternoon session on Thursday as volatility was induced by futures and options (F&O) expiry, coupled with negative global cues and the Jackson Hole Summit that kicks off today, where US Fed Chairman Janet Yellen is due to speak. Consequently, the key indices traded in the red, as selling pressure was seen in information technology (IT), automobile and metal stocks. The BSE market breadth was tilted in favour of the bears -- with 1,467 declines and 1,233 advances. On the NSE, on Thursday, there were 543 advances, 835 declines and 57 unchanged. 
 
Initially on Thursday, the benchmark indices opened on a positive note, in spite of mixed cues from their Asian peers and negative US markets. The markets also traded with apprehension as caution prevailed ahead of US Fed Chair Janet Yellen's speech on Friday -- a pointer to a possible interest rate hike, which can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India. In addition, the European markets fell sharply by almost 1.4%.
These factors contributed to the fall in the domestic markets.
 
The National Payments Corporation of India (NPCI) on Thursday said the Unified Payments Interface (UPI) will go live for customers of 21 banks. The relevant details of the service would be available on the website of 21 banks, the NPCI said. According to NPCI, the UPI application of 19 banks can be downloaded from Google Play Store in next two to three working days. The Bank Nifty fell by 0.27%.
 
Country's largest lender State Bank of India (SBI) on Wednesday said in a filing to the Bombay Stock Exchange ”..the Committee of Directors for Capital Raising at its meeting held on August 24, 2016 authorised the Bank to raise upto Rs11,100 crore Additional Tier 1 capital, by way of issue of Basel III compliant Perpetual Debt instrument in USD and/or INR, at par, through private placement to overseas and/or Indian investors,..". SBI shares closed at Rs250.05, down 1.81% on the BSE on Thursday.
 
Tata Sons' Chairman Cyrus P. Mistry on Wednesday said the Tata Group is looking for an investment opportunity in West Bengal. "I think the opportunities have to show themselves, and when they do, irrespective of the political environment, we will make the decision to invest," he said. Relations between the Tata group and West Bengal's ruling Trinamool Congress had become unpleasant after Tata Motors abandoned the Nano project at Singur in Hooghly district of Bengal in 2008 following persistent opposition from party supremo Mamata Banerjee on the land acquisition for the project. Banerjee opposed agricultural land acquisition and asked Tata to return 400 acres, out of 1,000 acres acquired for the project, to the farmers. The matter is still before the Supreme Court. Tata Motors shares closed at Rs493.75, down 0.85% on the BSE.
 
Tata Global Beverages Ltd (TGBL) is considering the restructuring options of its China operations, company Chairman Cyrus P. Mistry said on Wednesday. " In what way that restructuring will be done is yet to be seen. We are exploring multiple options," Mistry said while in response to a shareholder's query at the company's 53rd Annual General Meeting. Challenges exist in the China joint venture operations, Zhejiang Tata Tea Extraction Company Ltd. "Delays continue in stabilisation of the China business," said the company's latest annual report. The company’s shares closed at Rs140.50, up 0.11% on the BSE.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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From price manipulation to substandard supplies, Welspun Group has a chequered past

Home textile maker Welspun India has been in the news for supplying inferior bed sheet variant to one of its prestigious customers, Target. According to Target, Welspun had substituted Egyptian cotton with a cheaper type of cotton. Target has said that it was in the process of ending all business with Welspun. Welspun’s other clients which are big retailers Wal-Mart and JCPenny, have also ordered a review. The street, as expected, reacted very negatively to the development with the stock price slumping by more than 40% during the last three days post these allegations. The stock has been on the lower circuit for three days in a row with hardly anyone being able to sell and exit. Welspun was in damage-control mode. It announced that it would appoint external auditors, one of the top four firms, in order to carry out an audit of its supply systems and processes. 

However, controversies are not new for the Welspun Group. It has been involved in a number of legal issues and allegations in the past. Welspun Group’s name surfaced in the Anjar land scam in 2004. In the scam, IAS officer Pradeep Sharma was accused of allotting land to Welspun near Anjar in Kutch at a price far lower than the market rate. Welspun had given a contract to a company named Value Packaging for corrugated printed board cartons. It was alleged that Value Packaging was given a contract at a much higher rate in lieu of allotting land at a lower price. The accused in the scam was a related party to Value Packaging. 
 
On 2 December 2010, Securities and Exchange Board of India (SEBI) had banned promoter entities Welspun Corp from trading citing trade practices which were ‘fraudulent and unfair.’ The ban on promoter entities was lifted in an order dated 16 March 2012. The other companies that were accused on the same were Murli Industries, Ackruti City and Brushman India. SEBI had also prohibited businessman Sanjay Dangi and his group entities from dealing in any securities on account of charges of manipulation of share prices. According to SEBI, the four firms had raised funds through a qualified institutional placement or foreign currency convertible bonds during 2007-2009 and the Dangi group was observed to be trading churning the shares of these firms and manipulating the share prices. 
 
According to a Securities and Exchange Board of India (SEBI) order, there was substantial increase in the price of scrip (Welspun Corp) from to around Rs275 from Rs75 during the period 9 March 2009 to 19 November 2009. This was accompanied by spurts in volume in the scrip.  During to period 1 January 2009 to 25 March 2010, entities belonging to the Dangi group and Ashika group, along with Welspun Group itself were actively trading in the scrip, according to SEBI order. Majority of the activities of these clients in the derivatives segment was confined to this scrip. 
 
SEBI found that there were linkages between the Dangi group entities with the promoters of these companies. Welspun Trading Ltd, which is one of the promoters of Welspun, had stake in Dangi group entities. Another promoter entity GRG Cosmetics Ltd had a stake in Amit Business Ltd, a Dangi Group entity. 
 
In the second half of 2006, Welspun Corp into a contract for supplying pipes of specified certifications. The customer alleged that the pipes supplied did not meet the grade of steel specified. Many other customers of Welspun Corp had gone to the courts including Kinder Morgan Louisiana Pipeline LLC and T&R Pipeline Services on this score. Welspun Corp had then passed on the blame to Arcelor Mittal for supplying defective steel. Litigations like these have not only been very expensive for Welspun Corp, but have also damaged the brand of the company. Welspun India closed at Rs59.30 today, down nearly 10% on the Bombay Stock Exchange (BSE). 
 

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COMMENTS

Suketu Shah

1 year ago

I inherited Welspun shares few yrs ago when I knew nothing about shares(and sold it then in 2010).Now when I know substantially whats good for me in equities I still donot understand why we had welspun shares.Im quite sure even Wimbledon wl cancell their annual contract with Welspun.

ramanamurty malla

1 year ago

Thorough investigation should be initiated to inquire into wrong doings of Welspun group. You should ask Sebi to investigate sudden increase in share prices of Heritage foods and Jubilant Life Sciences in short period. How Sebi is unable to control unscrupulous traders games in controlling share prices with least quantity of deliveries. Innocent investors can loose hard earned money in this game. SEBI monitoring practice has to improve drastically

REPLY

Abhishek Kedia

In Reply to ramanamurty malla 1 year ago

Ramanmurtyji I too conveyed the same issue with moneylife .. thanks for raising the concern again

Abhishek Kedia

In Reply to ramanamurty malla 1 year ago

Ramanmurtyji I too conveyed the same issue with moneylife .. thanks for raising the concern again

Abhishek Kedia

In Reply to ramanamurty malla 1 year ago

Ramanmurtyji I too conveyed the same issue with moneylife .. thanks for raising the concern again

Srinivas Sreeram

1 year ago

Welspun has always had some unethical practices and each time it was pushed under the carpet. When doing international trade, one has to commit and should not changes for granted and contract management has been very poor thinking they can buy anyone for a price.

Abhishek Kedia

1 year ago

Dear Team,

A very informative article, also I would draw your attention towards few Scrips were even some respected Investors are there they are surging just by trading -
1. Jubliant Life Sciences - INR 300 to INR 500 in just 15 days.
2. Heritage Foods - INR 500 to INR 770 in 1month

I have written because the average delivery position is more than 50% but recently it is less than 20% which clearly shows trading and in high volumes.
I am writing as because of or the other way investor gets influenced and loose money.
Moneylife also give suggestion but recently when scrips went up it gave updates to hold also.. which is very fair.

So, I would request you to please look into such scrips.. Hope to get a reply

Abhishek Kedia

1 year ago

Dear Team,

A very informative article, also I would draw your attention towards few Scrips were even some respected Investors are there they are surging just by trading -
1. Jubliant Life Sciences - INR 300 to INR 500 in just 15 days.
2. Heritage Foods - INR 500 to INR 770 in 1month

I have written because the average delivery position is more than 50% but recently it is less than 20% which clearly shows trading and in high volumes.
I am writing as because of or the other way investor gets influenced and loose money.
Moneylife also give suggestion but recently when scrips went up it gave updates to hold also.. which is very fair.

So, I would request you to please look into such scrips.. Hope to get a reply

Abhishek Kedia

1 year ago

Dear Team,

A very informative article, also I would draw your attention towards few Scrips were even some respected Investors are there they are surging just by trading -
1. Jubliant Life Sciences - INR 300 to INR 500 in just 15 days.
2. Heritage Foods - INR 500 to INR 770 in 1month

I have written because the average delivery position is more than 50% but recently it is less than 20% which clearly shows trading and in high volumes.
I am writing as because of or the other way investor gets influenced and loose money.
Moneylife also give suggestion but recently when scrips went up it gave updates to hold also.. which is very fair.

So, I would request you to please look into such scrips.. Hope to get a reply

Nifty, Sensex still trendless – Wednesday closing report
We had mentioned in Tuesday’s closing report that Nifty, Sensex were awaiting triggers. The major indices of the Indian stock markets were range-bound on Wednesday and closed with small gains over Tuesday’s close. The trends of the major indices in the course of Wednesday’s trading are given in the table below:
 
 
Mixed global cues and lower crude oil prices led the key Indian indices to trade on a flat note during the mid-afternoon session on Wednesday. Selling pressure was seen in capital goods, banking and metal stocks. The BSE market breadth was marginally tilted in favour of the bulls -- with 1,540 advances and 1,171 declines and 202 unchanged. On the NSE, on Wednesday, there were 929 advances, 648 declines and 276 unchanged.
 
On Wednesday, the benchmark indices opened on a flat note on the back of negative Asian and European markets, and slightly positive US markets. Investors were also watchful of the negotiations for amendments in a tax treaty between India and Singapore. In addition, caution prevailed in the markets ahead of futures and options (F&O) expiry on Thursday and hampered the upward trajectory. Moreover, apprehension of a possible interest rate hike in the US following Fed Reserve Chair Janet Yellen's speech later during the week, and lower crude oil prices led the key indices to cap gains. Largely, the markets are flat ahead of the F&O expiry tomorrow (Thursday), pointed out market analysts. Also, the stock markets have been trading flat, as oil prices are steeply down, one of the main reasons being caution ahead of US crude oil inventory data due tomorrow (Thursday), explained market analysts. The foreign institutional investors (FII) continue to be net sellers during the week.
 
Tata Power on Tuesday reported a 76% drop in its consolidated net profit to Rs72.49 crore for the quarter ended June 30, as compared to Rs303.14 crore in the same period last year. "PAT (profit after tax) stood at Rs72 crore mainly due to one off items as well as first time impact on account of INDAS. One-off items includes Rs120 crore in CGPL (Coastal Gujarat Power Ltd) and regulatory orders pertaining to previous years of Rs62 crore and INDAS related adjustments of Rs130 crore," the company said in a statement. Its consolidated revenue in the quarter under review stood at Rs6,566 crore (including regulatory income/expense) as compared to Rs7,016 crore in the corresponding period last year. The company has announced acquisition of renewable assets and also commissioned several non-fossil fuel based projects during the year, which is in line with its strategic intent. Tata Power shares closed at Rs76.45, up 2.27% on the BSE.
 
Implementation of the Goods and Services Tax (GST) regime will have an inflationary impact, leading to increase in tea prices, Tata Global Beverages' Chairman Cyrus P. Mistry said on Wednesday. "GST will have an inflationary impact on the prices of tea, but this will be across the board," he said while responding to a query of a shareholder at the company's 53rd Annual General Meeting. Mistry said that initially that GST will have inflationary impact on the company's current coffee and tea business as they have a tax incidence. However, there might be "short-term impact" of the GST but the "long term benefit is significant", he added. Mistry said the industry has been making representations for a favourable rate as coffee and tea are widely consumed beverages cutting across economic strata. The company is looking to tap e-commerce platforms to sell its products. The company’s shares closed at Rs140.35, up 0.68% on the BSE.
 
The Delhi assembly on Tuesday passed the Delhi Tax on Luxuries (Amendment) Bill, 2016 which is aimed at reducing burden on tourists and citizens and offering small hotels relief from luxury tax. The bill, introduced by Deputy Chief Minister Manish Sisodia in the assembly on Monday, seeks to double the threshold limit of luxury tax from a room costing Rs750 per day to Rs1,500 by amending Sections 2 and 8 of the existing 1996 Act. Speaking in assembly during the discussion on Tuesday, Sisodia, who also holds the finance portfolio, said that it will benefit the common man who searches for budget hotels. India Tourism Development Corporation shares closed at Rs196.10, up 0.28% on the BSE.
 
Bandhan Bank, which marks its first anniversary on Tuesday, plans to expand its branch network to 1,000 by August 2017 from the existing 701, said its chief. "Next year when we meet to celebrate our second anniversary we will surely have at least 1,000 branches and more products," MD and CEO CS Ghosh said at the bank's first anniversary celebration. Pan India, 33% of its branches are in unbanked rural area, as against RBI's stipulation of 25%, he said. He said that 45% of branches are in West Bengal and 68% of them are in rural and semi-urban areas. Bank Nifty gained 0.07% on Wednesday.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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