Nifty, Sensex may be headed higher – Wednesday closing report

Nifty may rise as long as it stays above 8,250.


We had mentioned in our Tuesday’s closing report that the S&P CNX Nifty may move higher if it closes above 8,280. Today the index opened lower and traded in the green for the rest of the session, closing higher for the fourth consecutive session. It closed a shade above 8280.

S&P BSE Sensex opened at 27,358 and hit a low at 27,346 while Nifty opened at 8,244 and hit a low almost at the same level. Sensex rose up to the level of 27,527 and closed at 27,499 (up 96 points or 0.35%) while Nifty reached up to 8,291 and closed at 8,283 (up 34 points or 0.42%). NSE recorded a volume of 67.73 crore shares. India VIX rose 1.73% to close at 15.1200.

The Ministry of Finance announced the appointment of MD&CEOs of four nationalised banks, Indian Overseas Bank, Oriental Bank of Commerce, Vijaya Bank and United Bank of India. The government decided to separate the post of chairman and MD&CEO. For banks other than SBI, the chairman will now be a part time board member who will preside over the board meetings and not be an executive chairman.  The appointment in one more bank i.e. Syndicate bank is still under consideration of Government and would be decided very shortly.

Fiscal deficit was Rs 5.25 trillion ($83.08 billion) during April-November, or 98.9% of the full-year target, data showed on Wednesday. The deficit was 93.9% during the same period a year ago.

India's total external debt stood at $455.9 billion at the end of September, up $13.7 billion or 3.1% from the end of March, the Finance Ministry said in a statement on Wednesday.


The share of India's short-term debt in the total external debt was at $86.4 billion or 18.9%.

Gujarat Pipavav (8.91%) was the top gainer in the ‘A’ group on the BSE. The stock hit its new 52-week high today. It has entered into an arrangement with NYK Auto Logistics (India) Pvt. Ltd. wherein NYK has been sub-leased land for developing a dedicated common user integrated RO-RO (roll-on/roll-off) yard at Pipavav Port. The yard is expected to be commissioned in the second quarter of 2015 and will be provided with all port and related facilities by Gujarat Pipavav Port.

Tube Investments (1.72%) was among the top five losers in ‘A’ group on the BSE. The stock gave up gains today after hitting its 52-week high on Tuesday.

BHEL (2.65%) was today again the top gainer in the Sensex 30 pack.

As reported by PTI, the Finance Ministry has decided not to extend excise duty cuts on automobiles and consumer durables beyond December 31. Mahindra & Mahindra (1.85%), Bajaj Auto (0.66%) and Maruti (0.63%) were among the top three losers in the Sensex 30 stock.

On Tuesday, US indices closed in the red. A report yesterday showed consumer confidence rose less than estimated. The Conference Board's consumer confidence index increased to 92.6 in December from a revised 91, a month earlier. Another report showed home prices in 20 US cities rose at a slower pace in the year ended in October.

Asian indices trading today closed in the positive. Shanghai Composite (2.18%) was the top gainer. The HSBC China Manufacturing Purchasing Managers' Index, a gauge of nationwide manufacturing activity, fell to a final reading of 49.6 in December from 50 in November, HSBC Holdings PLC said today. European indices that were open, were trading in the green.


Ordinance approved for amendments to Arbitration and Conciliation Act

This less politically contentious change could help get quicker decisions and improve the entire arbitration process


With all political and public focus on the ordinance for the changes to the Land Acquisition Act, another ordinance has slipped by relatively unnoticed. The cabinet approved an ordinance to amend the Arbitration and Conciliation Act yesterday.
The ordinance has been sent to the President and will come into force once it gains assent from President Pranab Mukherjee.
The changes in the Act will make it mandatory for the Presiding Judge/ officer to clear the case within 9 months. This is aimed at encouraging foreign investors to come into India and trust the focus of the administration on speedy disposal of disputes.
The Act still has a provision for an extension for the settlement proceedings but the High Court will have the choice to allow or disallow such an extension.
As the recent past shows, many high-profile cases like the Vodafone transfer pricing case and the Reliance gas pricing case decided to avail of arbitration. Considering the large volume of cases that involve such disputes, this comes as a welcome sign.


MF Utilities: Will the transaction platform ever be launched? And who will benefit?

The MF Utility platform, which has been facing several delays, is now expected to be launched in May 2015


The Association of Mutual Funds in India (AMFI) has perhaps spent crores of rupees to build a MF Utility, a comprehensive mutual fund platform to buy and sell mutual funds. The platform was expected to be launched in June 2014. It has suffered further delays and is now expected to be launched in May 2015. Surprisingly, the platform which was conceptualised in 2011, has taken more than three years to be launched. The market regulator, Securities and Exchange Board of India, recently gave its approval, and yet, it may take another six months before the platform is opened up to investors. If this is meant to be a mere order routing platform, what seems to be causing such immense delays?
The platform, which is currently co-owned by 25 fund houses, is expected to help advisors cut down their operational costs. The MF Utility platform is now enrolling only distributors. According to this media report, close to 550 distributors from 140 cities have signed up for the platform.
Earlier fund houses seemed to be divided on the need for this platform and to put in additional capital for it. AMFI has been able to rope in just 25 out of the 44 fund houses in business. Canara Robeco Mutual Fund, HSBC Mutual Fund etc. have chosen not to participate. Despite this, with all the major fund houses on board, there still seems to be issues surrounding the launch.
The platform is expected to be launched in two phases— first phase for distributors and the second for investors. The only benefit provided by this platform is that investors and distributors can have a consolidated platform for mutual funds. Hence, they would not need to visit the respective registrar and transfer agent (R&TA) of each mutual fund. However, this would be of little additional benefit, as the two major R&TA’s—CAMS and Karvy cover 95% of the industry. 
In fact, there already exists a platform for mutual fund distributors, namely Finnet jointly developed by two registrars and transfer agents—Computer Age Management Services (CAMS) and Karvy. This platform covers almost 95% of the industry’s schemes and products. If AMFI’s idea of using technology is to improve ‘distribution’, it clearly missed the point.
There are already different ways one can buy funds online. Most of the serious fund houses have their own portal for transacting online, since the creation of the direct plan route. Another way is through the stock exchange platform.
The MF Utilities website mentions that one of the most useful features of this system is that “investors can invest through a single cheque if they wish to invest in multiple funds.” How many investors who would benefit from such a feature is not known.
According to AMFI, investors will now have a single login ID instead of multiple, providing unified access to all AMCs. Any investor can now access any scheme online either directly or through a distributor.
In an earlier article, we pointed out that this platform may favour tech-savvy investors, but unfortunately, today investors still need to be persuaded to invest in equity mutual funds. The MF Utility will be a “Do-It-Yourself” model which has low chance of succeeding in financial services because transaction is only the last link in a long chain of decisions. Investors tend to drop off fairly early in the chain.



Dinesh Pandita

2 years ago

As far as i have understood from the Multi utility Website, this platform also enables yout to switch within the AMC's, If i have a scheme of DSP i can switch to a schme of HDFC directly. I need not to first redeem and then issue a new cheque.


2 years ago

I think more information needs to be sought by the ML team before posting an article like that.

Narendra Doshi

2 years ago

WHEN SOMETHING has worked for almost about 3-4 years, 95% time for 95% issues, it is better to improvise the same rather than going for a new one in trying to solve almost 99-100% issues.
I think the contents are appealing


2 years ago

Nothing can beat the 'where to sign' platform of investing in Mutual Funds

Most convenient way to invest in MFs is by asking the agent . . . where to sign?

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