Three days of continuous fall may be followed by a small gain but the trend is down
The market, which witnessed a recovery from the lows in the last hour of trade on buying in select blue chips, still settled in the negative for the third consecutive day. Disruption of Parliament proceedings for the sixth day in a row, which has led to a halt in the reforms process, is making investors restless. Yesterday we had mentioned that the Nifty will move sideways with a negative bias, however, a lower low may take the index further down to its first support at 5,325. Today the index went below this level and settled slightly above it at 5,335. We may now see the benchmark seeing a small bounce back. The National Stock Exchange (NSE) saw a much larger volume of 64.93 crore shares and the advance decline was hugely negative at 400:1277.
The market opened flat with a negative bias tracking weak global cues and the continuing political imbroglio at the Centre. US markets settled mostly lower overnight as investors await the announcement from Federal Reserve chief Ben Bernanke at Jackson Hole, Wyoming, on Friday. Markets in Asia were mixed in morning trade as the Japanese government downgraded its growth assessment in view of the global slowdown.
Back home, the Nifty started off at 5,348, down two points and the Sensex fell three points to 17,676. Buying in select stocks enabled the market hit its intraday high in initial trade. At this points, the Nifty rose to 5,359 and the Sensex 17,712.
The benchmarks made half-hearted attempts to venture into the positive in the morning session but strong selling pressure amid choppy trade ensured that the market stayed lower.
Meanwhile, Deepak Parekh, chairman, HDFC, in an interview to a popular business TV channel, expressed concerns of a possible downgrade if the current situation of policy paralysis continued. “If downgraded to junk status, we will see substantial outflows,” he said.
The market continued to slide further in noon trade as a lower opening of the European indices added to the woes. The indices dropped to their lows a little before 2.00pm. At this point the Nifty fell to 5,313 and the Sensex retracted to 17,571.
Bargain hunting at the lows enabled the market stage a minor recovery in late trade. But the gains lacked strength leaving the benchmarks in the negative for the third day.
The Nifty settled 16 points down at 5,335 and the Sensex finished the trading session at 17,632, a loss of 47 points over its previous close.
Among the broader markets, the BSE Mid-cap index declined 1.03% and the BSE Small-cap index dropped 1.42%.
The sectoral gainers were BSE IT (up 0.92%); BSE Fast Moving Consumer Goods (up 0.70%); BSE TECk (up 0.58%) and BSE Power (up 0.57%). BSE Metal (down 2.44%); BSE Capital Goods (down 1.66%); BSE Bankex (down 0.97%); BSE Auto (down 0.81%) and BSE PSU (down 0.68%) languished at the bottom.
The Sensex was led by TCS (up 2.24%); Sun Pharmaceutical Industries (up 1.69%); Tata Power (up 1.55%); Dr Reddy’s Laboratories (up 1.53%) and NTPC (up 1.48%). The main losers were Sterlite Industries (down 5.13%); Jindal Steel (down 4.88%); Hindalco Industries (down 3.09%); Larsen & Toubro (down 2.53%) and ONGC (down 1.91%).
The top two A Group gainers on the BSE were—United Breweries (up 9.22%) and Gujarat State Petronet (up 4.62%).
The top two A Group losers on the BSE were—Welspun Corp (down 9.33%) and Wockhardt (down 7.43%).
The top two B Group gainers on the BSE were—HCL Infosystems (up 20.50%) and Koa Tools India (up 17.39%).
The top two B Group losers on the BSE were—Net 4 India (down 19.96%) and Gemini Communication (down 19.92%).
The main performers on the Nifty were Power Grid Corporation (up 3.42%); TCS (up 2.28%); Asian Paint (up 1.80%); Dr Reddy’s (up 1.67%) and Sun Pharma (up 1.65%). Sterlite Ind (down 5.53%); Jindal Steel (down 5.31%); Jaiprakash Associates (down 3.50%); Hindalco Ind (down 3.27%) and Sesa Goa (down 3.20%) settled as the top losers.
Markets in Asia closed mostly down as investors turned cautious ahead of an announcement from Fed chief Ben Bernanke later this week. Concerns about China’s economic growth also and the scaling down of its growth assessment by the Japanese government also weighed on the markets.
The Jakarta Composite shed 0.07%; the KLSE Composite lost 0.06%; the Nikkei 225 declined 0.57%; the Straits Times fell 0.15%; the Seoul Composite slipped 0.08% and the Taiwan Weighted tanked 1.42%. On the other hand, the Shanghai Composite climbed 0.85% and the Hang Seng rose 0.07%.
At the time of writing, among the European markets the CAC 40 of France was down 0.58%, the DAX of German was 0.32% lower while UK’s FTSE 100 was 0.04% higher. At the same time, the US stock futures were marginally higher.
Back home, foreign institutional investors were net buyers of shares aggregating Rs200.40 crore on Monday. On the other hand, domestic institutional investors were net sellers of equities totalling Rs500.71 crore.
IT firm Mahindra Satyam (Satyam Computer Services) has partnered with global enterprise applications company IFS for joint sales and marketing activities of IFS’ Applications software suite and staff training. The agreement covers joint marketing, including sponsorship of the 2012 IFS World Conference, which will be held in October in Gothenburg, Sweden, Mahindra Satyam said in a statement today. The stock tanked 3.47% to settle at Rs95.90 on the NSE.
Dhanuka Agritech, a crop protection solutions company, has launched three agrochemical products in Tamil Nadu. One of the new products is an insecticide that can tackle sucking insects in cotton, vegetable, fruits, cashew and tea. The other, Fluid, is to fight larval insecticide in major crops, while the third one, Fuzi Super, is an herbicide for paddy. The stock dropped 3.23% to close at Rs90 on the NSE.
After massive protests by locals, the Goa State pollution Control Board (GSPCB) has asked Sesa Goa to stop all activities at its coke oven unit at Navelim in Bicholim taluka, 40 km away from the state capital of Panaji. The locals held a day long bandh yesterday protesting against the increasing pollution allegedly due to coke oven plant at Navelim. The stock declined 3.20% to close at Rs181.50 on the NSE.
Journalistic ethics apply not only to the print media but also to the electronic media and there is no reason why electronic media be not regulated by a statutory body says the Press Council
With the market already full of ULIPS that inflicted losses on the savers, here’s another product that joins the category. Will it be any better than the existing ones?
HDFC Life Insurance has launched a single premium ULIP (unit linked insurance product) plan named “Invest Wise”, which is an investment product aimed at saving for long-term goals, such as for children’s education and marriage or else investors’ own retirement planning. Targeted towards its so called “Wisdom Investor” segment, the plan is meant for the age group of 45 to 70 years with a fixed term of 15 years and offers a five-fund option for investment. The settlement options include withdrawal of funds in various patterns included the one for five years. The sum assured is fixed at 1.1 times the premium. There is no cap on the premium.
Since the sum assured is low, more of the premium money would be directed towards investment, which means more returns at withdrawal or maturity. Also, since the term is fixed, investors should be able to align the plan to the life goals they wish to fulfil through it.
In case death happens before 60, the sum assured minus withdrawals made in two years proceeding the year of death or the fund value, whichever is higher, would be paid. However, in case of death after 60, all withdrawals will be deducted from the sum assured for comparison with the fund value.
Many such plans exist in the market, the only minor difference being that this plan would invest in more market-oriented instruments compared to the other child or retirement ULIPS. In other words, this seems to be a me-too product with little difference. The bigger issue is that we are never sure how the corpus would grow over time.