The five-day rally was interrupted sharply today and the market will be weak on Monday, at least initially
The market opened in positive terrain, tracking its Asian counterparts which were trading with gains. The key indices touched their intra-day highs in morning trade, but turned southward as the scope of the CBI probe into the 2G scam widened with more big names coming under the scanner.
The market fluctuated in the post-noon session, popping in and out of the red a couple of times, when a strong bout of profit-booking took the key indices to the day's lows. The sell-off resulted in all sectoral gauges slipping into the red.
As suspected, after five continuous days of rallying, the market declined today. The Sensex and Nifty opened on a positive note at 18,564 and 5,558. Within an hour of trading, they touched the day's high of 18,691 and 5,599. It was also a 15-day intra-day high (starting 31 January 2011). Thereafter, the market gradually declined.
The indices made an intra-day low of 18,160 and 5,442 in late afternoon trade. Today's intra-day low was lower than yesterday's low and the market closed below Thursday's low, as well. The Sensex ended 295 points lower at 18,212 while the Nifty was down 88 points at 5,459.
Does today's sharp fall (a higher high and lower low compared to yesterday) signal a trend change? On Monday, the Nifty should close above 5,520 to keep the rally intact. We expect initial weakness on Monday at least. The advance-decline ratio on the NSE was a terrible 388:1338.
The market breadth on the Sensex and Nifty was in favour of the declining stocks. The Sensex closed with 25 losers and five gainers while the Nifty returned home with 39 declining stocks against 11 advancers. The broader indices underperformed the Sensex with the BSE Mid-cap index declining 1.98% and the BSE Small-cap index tumbling 2.35%.
The BSE Realty index (down 4.04%) was the top loser in trade. It was followed by BSE Auto (down 2.39%), BSE Oil & Gas (down 2.09%), BSE Capital Goods (down 1.97%) and BSE Consumer Durables (down 1.84%).
Hindustan Unilever (up 1.99%), Jindal Steel (up 1.55%) and Cipla (up 0.57%) were the noteworthy gainers on the Sensex. The top losers were Reliance Communications (down 6.80%), Reliance Infrastructure (down 5.60%), Jaiprakash Associates (down 5.54%), Tata Motors (down 3.91%) and ONGC (down 3.40%).
The government, which today launched a new series for measuring inflation, pegged the consumer price index (CPI) based inflation at 6% for January this year. The figure was arrived based on a comparison with the annual all-India CPI index average for the whole of 2010.
According to the new series, the all-India consumer price index stood at 106 (provisional figure) for January 2011, taking the base at an annualised level of 100 for the entire year.
Markets in Asia, barring the Chinese benchmark, settled higher on the last trading day of the week. Investor sentiments were lifted on positive economic data from the US on Thursday which suggested that the pace of the global recovery was intact. However, worries about policy-tightening initiatives spooked the market there. However, geo-political tensions in the Middle-East kept the gains in check.
The Hang Seng surged 1.26%, the Jakarta Composite jumped 1.95%, the KLSE Composite gained 0.60%, the Nikkei 225 added 0.06%, the Straits Times gained 0.13%, the Straits Times rose 1.82% and the Taiwan Weighted was 1.84% higher. On the other hand, the Shanghai Composite tanked 0.92% at the end of trade.
The Chinese central bank on Friday raised the banks' required reserves by 50 basis points, the second increase this year in its effort to curb rising prices. Meanwhile, China's annual inflation stood at 4.9% in January, up from 4.6% a month earlier.
Back home, institutional investors were net buyers in the equities segment on Thursday. Foreign institutional investors pumped in Rs37.99 crore and domestic institutional investors bought stocks worth Rs244.40 crore.
Ind-Swift Laboratories (down 3.57%) has received the Pharmaceutical & Medical Devices Agency (PMDA) approval from the Japanese government for Pioglitazone and Risedronate Sodium to be manufactured at its facilities at Derabassi in Punjab. With this achievement, Ind-Swift Laboratories has become the first Indian company to get Japanese approval without any observations. This would pave way for huge exports by the company to Japan.
IRB Infrastructure Developers' (down 1.36%) wholly-owned subsidiary-IRB Tumkur Chitradurga Tollway-has achieved financial closure in terms of the concession agreement executed with NHAI, by tying up debt of Rs831 crore. The total cost of the project is Rs1,142 crore, out of which the company will finance Rs831 crore via debt and around Rs311 crore through equity contribution.
Pratibha Industries (up 0.43%) has secured a contract from Oil and Natural Gas Corporation. The project is for the construction of an intelligent corporate office building at the Bandra-Kurla Complex, Mumbai. The total value of the contract is worth Rs240 crore and is to be completed in 18 months.
Before being selected to head SEBI, Mr Sinha was the chairman and managing director of UTI Mutual Fund, and prior to this, a joint secretary in North Bloc
Upendra Kumar Sinha assumed the office as the chairman of the Securities and Exchange Board (SEBI) today from the outgoing chairman Chandrashekar Baskar Bhave, who had considerably raised the bar of the authority of the institution during his three-year tenure.
As the eighth chairman of the market's watchdog, UK, as he is known among his friends, has a tough task cut out for him, since his predecessor had placed the institution highly above suspicion and had also shown the real powers of SEBI to one and all-especially the mighty.
Before being selected to head SEBI, Mr Sinha was the chairman and managing director of UTI Mutual Fund, and prior to this, a joint secretary in North Bloc (June 2002-October 20052).
Hopefully, the persuasive skills of this 1976 batch IAS officer from the Bihar cadre will come to his aid as while dealing with the government at a time when the latter is seriously planning to clip the financial autonomy of various regulators by forcing them to keep the funds with the Consolidated Fund of India.
The State has increased milk procurement prices by Rs2 per litre for cow milk and Rs2.5 per litre for buffalo milk. This hike will also have a direct impact on the prices of milk products—curd, paneer and shrikhand
After the spiralling onion prices that made the 'aam aadmi' weep, now it's the turn of milk prices to make them cry.
The Maharashtra government has increased milk procurement prices by Rs2 per litre for cow milk and Rs2.5 per litre for buffalo milk. This hike will also have a direct impact on the prices of milk products-mostly curd (yoghurt), paneer (cottage cheese) and shrikhand.
B Bhandari, general manager (marketing), Warana Dairy, told Moneylife that there would be a rise in the prices of milk products like paneer and shrikhand as the production cost of these products will go up.
Another official from a leading Mumbai-based milk dairy said (preferring anonymity), "Because of the rise in milk prices, there could be an increase in the prices of milk products. We will be thinking on that line (hiking prices)."
The decision to increase milk-procurement prices has been taken as the cost of milk production has increased, due to rise in fodder and labour charges.
Vinayak Patil, chairman of Mahananda Dairy, explained why milk prices are going up. "The milk procurement price has increased, as the cost of milk production has gone up. This is mainly because of the rise in the cost of fodder and labour. The production of milk has also come down due to the inclement weather. As milk procurement prices have increased, we have had to hike milk prices."
Following the government's decision, major milk dairies in Maharashtra have hiked the prices in the range of Rs1-Rs3 per litre, depending on the type of milk. Dairies like Warana and Gokul have hiked their prices by Rs2 per litre (for cow milk) and Rs3 per litre (for buffalo milk). Mahananda Dairy, one of the state's leading milk cooperatives, has decided to increase prices by Rs1 per litre on both types of milk.
Interestingly, market leader Amul-owned by Gujarat Cooperative Milk Marketing Federation (GCMMF)-which had earlier refused hike prices, has also decided to join the trend. Amul has increased prices by Rs1 per litre for its milk brand Amul 'Taaza' and Amul 'Lite Slim' and 'Trim Milk'.
According to R S Sodhi, chief general manager, Amul, "Earlier we did not agree to the decision of increasing milk prices by Rs2- Rs3. Now, we have increased the prices by Rs1 per litre for Amul Taaza and Amul Slim and Trim." However, Mr Sodhi ruled out any possibility of rise in other milk products by Amul.
Meanwhile, the Karnataka government permitted the Karnataka Milk Federation to increase the price of milk. Accordingly the milk prices in the state have gone up by Rs2 per litre.