However, if Nifty does not make a lower low and closes above 8,560, bulls will regain control
In line with US indices, which closed lower on Monday, the Indian indices too opened lower. We had mentioned in Monday’s closing report that NSE’s CNX Nifty will shoot up if the Reserve Bank of India (RBI) surprises with a rate cut. If not, the index will move sideways. Except for the volatility noticed at the time of RBI announcement during which the Nifty hit both its intra-day low and the high, the benchmark moved sideways for the entire session and closed in the negative for the second consecutive session.
The S&P BSE Sensex opened at 28,522 while Nifty opened at 8,535. The indices hit a low at 28,386 and 8,505 and high at 28,576 and 8,560, respectively. Sensex closed at 28,444 (down 116 points or 0.40%) while Nifty closed at 8,525 (down 31 points or 0.36%). The NSE recorded a volume of 80.36 crore shares. India VIX fell 6.12% to close at 12.3950.
The RBI kept its main lending rate viz. the repo rate unchanged at 8% and also kept the cash reserve ratio of scheduled banks unchanged at 4% of net demand and time liabilities. RBI said after a monetary policy review that if the current inflation momentum and changes in inflationary expectations continue, and fiscal developments are encouraging, a change in the monetary policy stance is likely early next year, including outside the policy review cycle.
The output of eight core industries, having a combined weight of 37.9% in the Index of Industrial Production (IIP), galloped 6.3% in October 2014, government data released on Monday showed. Coal production shot up 16.2%, while the electricity generation zoomed 13.2% in October 2014 over October 2013, mainly contributing to the healthy growth in the output of overall eight core industries. The core sectors output growth stood at 4.3% in April-October 2014 compared with 4.2% growth in the corresponding period last year. HSBC India Services PMI for November 2014 is due on Wednesday.
On Monday, the Department of Financial Services invited suggestions from general public on various parameters as to how to improve performance of public sector banks.
Recently RBI eased imports curbs by scrapping 80:20 schemes. According to PTI report, gold today posted this year's biggest single-day rise of Rs840, and regained the Rs27,000 per 10-gram level after a gap of over one month. Silver also recorded a significant gain of Rs2,700 to reach Rs37,000 per kg on increased offtake by industrial units and coin makers.
Coming back to markets, Sun Pharma Advanced Research (9.75%) was the top gainer in ‘A’ group on the BSE. The stock was in news as it announced that the US FDA has issued a complete response letter to its new drug application for Latanoprost BAK-free eyedrops.
While the FDA did not seek any additional information for supporting clinical data, it sought additional information on certain labelling and other deficiencies for processing the NDA. The company believes that this additional information request from the FDA can be addressed on priority.
Public sector oil marketing companies were pulled lower after the government raised factory gate duties on petrol by Rs2.25 a litre and on diesel by Re1 per litre with immediate effect. BPCL (4.06%) was among the top four losers in the ‘A’ group on the BSE.
Bharti Airtel (1.76%) was among the top two gainers in Sensex 30 pack. the company was in news as on Monday it said that it will offer high-speed 3G roaming services to its 8.5 million customers in Odisha.
State-run GAIL (2.85%) was the top loser in Sensex 30 stock. Media reports say that the oil and power ministry is also looking at avoiding double-charging of marketing margins once the gas is pooled. For the gas pooling to become more viable and help the shortage of gas faced by stranded power plants, the government is now looking at cutting GAIL’s marketing margins by 75%.
On Monday, US indices closed in the red. The Institute for Supply Management said its US manufacturing index edged down to 58.7% in November from 59% in October. A separate report on Monday by the research firm Markit said that purchasing managers index for November showed a reading of 54.8, down from 55.9 in October. That marks the lowest reading in ten months.
Except for NZSE 50 (0.20%) and Taiwan Weighted (0.91%) all the other Asian indices closed in the green. Shanghai Composite (3.11%) was the top gainer.
European indices were showing mixed trading while US Futures were trading in the green.
Sahara's properties at Jodhpur, Chomu, Pune and Vasai near Mumbai are expected to fetch about Rs2,700 crore
The Supreme Court on Tuesday allowed Subrata Roy-led Sahara group to sell four of its domestic properties that are likely to fetch about Rs2,700 crore. This includes Sahara's properties at Jodhpur, Chomu, Pune and Vasai near Mumbai.
The apex court also directed Sahara group to handover the proceeds from the sale to market regulator Securities and Exchange Board of India (SEBI) to facilitate bail for Roy.
Earlier, Sahara had told a bench headed by Justice TS Thakur that it could not sell its two hotels in London and another in New York as Bank of China, which has charge on these, has put hurdles.
When SEBI objected to deduction from the loan amount on Sahara's overseas properties for paying to Bank of China, the apex court asked SEBI to seek more details from Roy-led group on the loan agreement.
Last week, the SC had asked SEBI to suggest an asset management agency that could arrange better deals for the Sahara properties up for sale.
Sahara chief Roy has been imprisoned in Tihar Jail since 4th March on Court orders and his bail requires Rs10,000 crore, including Rs5,000 crore in cash and the rest in bank guarantees.
With an eye on auctioning the spectrum in February 2015, DoT and TRAI are hoping to finalise the consultative process for deciding base prices by 22 December
The Department of Telecommunications (DoT) under the Government of India (GoI) is planning on going ahead with auctions of 2G and 3G airwaves together in February. The auctions will be conducted after taking into account the base price recommendations given by the Telecom Regulatory Authority of India (TRAI).
The DoT had asked TRAI to expedite the decision on base price. TRAI released the Consultation Paper on “Valuation and Reserve Price of Spectrum: 2100 Mhz,” today. TRAI has invited comments and inputs on the Consultation Paper by 15 December. After counter-comments on 19 December, an Open House will be held on 22 December.
The Consultation Paper noted that the 2100 Mhz band which is used by 3G services is currently being used by the Defence services. Unless the Defence services agree to vacate this spectrum, this frequency will be unavailable for the auction.
When spectrum was auctioned in 2010, the Defence Services had vacated 20 Mhz out of the 25 Mhz spectrum that was being used by them. The agreement at the time was that the remaining 5 Mhz of spectrum would be vacated only if alternate infrastructure was made available for the Defence Services to migrate to.
If the Defence Services release only the 5 Mhz held by them in the 17 circles, then licenses to these circles will be auctioned. Another possibility is that the Defence Services would migrate to the 1,900 Mhz spectrum, so that not only it frees up the 5 Mhz held by them in various circles, but also an additional 15 Mhz on a pan-India basis.
Telecom companies, as well as the regulator, have been of the view that the auction should take place only when adequate spectrum is made available, and the bidding should be held simultaneously for both the services - 2G and 3G.