Nifty, Sensex not yet out of the woods: Monday Closing Report

A close above 5,300 may mean respite from bears—for now

The market closed lower today on the impact of the downgrade in US sovereign credit rating over the weekend and fears that this could lead several economies into a recession all over again. Markets across the world fell sharply from the Asian markets to Europe. The decline in the domestic market was on a volume of 73.98 crore shares on the National Stock Exchange (NSE). Any gains from here on will depend on developments in the US and Europe in the days to come. A close above 5,300 on the Nifty would imply some meaningful gains.

The Nifty opened this morning with a deep cut of 128 points at 5,084 and the Sensex resumed 398 points down from the weekend close. IT and metal sectors led the fall early on. Assurances by policymakers over the weekend that India could withstand global pressures were in vain as sellers dominated the market.

The indices touched the day's lows in the first hour itself, as the sell-off intensified. The Nifty sank to 5,054 and the Sensex plunged below the 17,000-mark to 16,759, off by 157 points and 547 points respectively. The intra-day lows on the Nifty and the Sensex were at levels last seen on 11 June 2010.

However, investors saw a good opportunity at the lower levels and resorted to bargain hunting, lifting the indices upwards slowly. The market touched the day's high in noon trade, with the Nifty up to 5,204 and the Sensex touching 17,248, although in negative territory.

In the post-noon session, the market pared some gains again, as nervousness was evident on reports of weak US stock futures weighed down sentiments further. The Nifty finally closed at 5,119, down 93 points, and the Sensex finished trade at 16,990, a cut of 316 points. The market closed in the negative for the fifth straight day.

The advance-decline ratio on the National Stock Exchange (NSE) was 329:1381.

The BSE Mid-cap index declined 1.52% and the BSE Small-cap index tanked 2.23%.

The decline resulted in all sectoral indices closing lower today. BSE Realty (down 4.46%), BSE IT (down 4.33%), BSE TECk (down 3.60%), BSE Metal (down 3.50%) and BSE Power (down 1.62%) were the top losers.

Hero MotoCorp (up 4.03%), ONGC (up 2.35%), Mahindra & Mahindra (up 1.68%), Bajaj Auto (up 0.86%) and Hindustan Unilever (up 0.86%) managed to stay on top in the Sensex list. The main losers were DLF, Hindalco Industries (down 6.85% each), Tata Motors (down 6.51%), Infosys (down 4.73%) and TCS (down 4.49%).

Among the new entrants on the Sensex, Coal India shed 0.01% to close at Rs392.30, while Sun Pharma added 0.04% to end at Rs497.90.

Beating the reversal, Hero MotoCorp (up 3.85%), M&M (up 2.70%), Punjab National Bank (up 2.27%), ONGC (up 2.11%) and Ambuja Cement (up 2.01%) finished as the top gainers on the Nifty. Reliance Capital (down 7.68%), Hindalco (down 7.52%), Reliance Power (down 7.31%), DLF (down 7.11%) and Tata Power (down 6.68%) were the major losers on the index.

Markets in Asia ended weak, even as world leaders worked towards stemming concerns of a fresh recession. G7 finance leaders pledged to take whatever action was needed to stabilise markets, while the European Central Bank, in a statement, suggested it would buy Italian and Spanish bonds in a bid to stop the debt crisis from spreading further.

The over 7% dive in the Seoul Composite earlier today forced the Seoul bourse operator to suspend trading on the main exchange for five minutes.

The Shanghai Composite plunged 3.79%, the Hang Seng sank 2.17%, the Jakarta Composite slipped 1.82%, the KLSE Composite declined 1.80%, the Nikkei 225 tumbled 2.18%, the Straits Times tanked 3.70%, the Seoul Composite and the Taiwan Weighted both closed down 3.82%.

Back home, foreign institutional investors were net sellers of stocks worth Rs1,788.96 crore on Friday. On the other hand, domestic institutional investors were net buyers of equities worth Rs1,372.49 crore.

Rainbow Papers, as a part of its corporate social responsibility (CSR) activities, has decided to set up 'Rainbow Institute of Technology & Research' for imparting practical training in the field of paper manufacturing, power generation and other allied matters. The stock slipped 1.27% to Rs58.50 on the NSE.

Cholamandalam Investment & Finance Company has drawn up plans to raise Rs60 crore through two-year bonds at a coupon rate of 10.35% The company is among the top five NBFCs in the country operating in vehicle finance, home equity, corporate and mortgage finance segments. The scrip closed at Rs160, down 0.59% on the NSE.

India's largest lender, State Bank of India (SBI) expects to raise Rs23,000 crore through a rights issue by the end of the fiscal. The bank is also looking to raise lending rates by as much as 50 basis points this week. The government owns 59.4% in the bank and it needs to infuse around Rs14,000 crore if it wants to retain its 59% stake. The stock fell 0.84% to close at Rs2,216.10 on the NSE.


Finance ministry must be in the know of gold transactions, says CIC

Hearing an RTI appeal, chief information commission orders ministry to be the nodal body; Reserve Bank of India and finance ministry to submit affidavits in case of denial of any deals in the yellow metal

At a time when popular and judicial pressure is building up on the government regarding investigation of scams and financial accountability, the babus have mastered the art of passing the buck and being elusive. The ministry of finance too, has been acting slippery in furnishing information to the public. However, RTI (Right to Information) activists have found a way to make the financial authorities accountable.

While hearing an appeal by an RTI activist, the chief information commission (CIC) has ruled that the finance ministry must be the nodal body knowing the details of gold trade in India, and has asked the ministry and the RBI (Reserve Bank of India) to submit affidavits in case they deny the same.

"Commission holds that it is the Ministry of Finance who would be the nodal ministry in respect of the subject matter. Therefore, the ministry of finance, through its secretary is directed to submit (an) affidavit signed by an officer not lower in rank of deputy secretary to give (an) affidavit that information is not held by the ministry or any of its entities. Similarly CPIO, Reserve Bank of India is directed to give a similar affidavit to the commission", the commission ruled on 14th July. The affidavits have to be filed within two weeks of receipt of the judgement.

RTI applicant, Subhash Chandra Agrawal said, "I received the judgement yesterday, and I think it is the same with the ministry. I am expecting the information or the affidavits after fourteen days."

Mr Agrawal had filed an RTI (Right to Information) application in May 2010 with the department of revenue, asking for details of gold sales and consumption happening in India, and estimates for unaccounted transactions. However, the CPIO of the department replied that such information is not held by them, following which Mr Agrawal filed the first appeal in September. Dissatisfied once again, Mr Agrawal went for a second appeal before the commission.

"The RTI petition filed at the Department of Economic Affairs kept shunting between various public authorities including the RBI, Central Board of Direct Taxes (CBDT), Department of Revenue and Directorate of Enforcement with everybody transferring the petition to each other under Section 6(3) of the RTI Act", said Mr Agrawal.

He said, "India being the largest purchaser of gold, sets the global trend. Unaccounted money is being largely invested in gold and silver. There is every possibility that money deposited in foreign banks now being transferred is responsible for sudden rise in prices of gold and silver."


Mahindra & Mahindra Q1 net profit rises 8% on robust sales

Commenting on the results, the company said: "The growth in the profit despite the relentless increase in material costs is due to good volume performance by both vehicles and tractors and tight control on expenses"

New Delhi: Auto major Mahindra & Mahindra (M&M) today reported a 7.56% jump in standalone net profit for the quarter ended 30th June to Rs604.88 crore compared to Rs 562.39 crore for the corresponding period last year, reports PTI

The performance was attributed to good sales and cost-control initiatives.

The company's standalone total income also increased by 30.49% during the first quarter of the fiscal to Rs6,733.54 crore from Rs5,160.10 crore in the year-ago period, it added.

Commenting on the results, the company said: "The growth in the profit despite the relentless increase in material costs is due to good volume performance by both vehicles and tractors and tight control on expenses."

During the quarter, M&M's total sales went up by 24.25% to 1,01,997 units from 82,093 units in the same period of 2010.

In the domestic market, sales stood at 96,280 units, up 22.93% from 78,318 units in the year-ago period. Exports grew by 82.94% to 5,717 units during the review period from 3,125 units in Q1 last fiscal.

Sales of passenger vehicles jumped 20% to 48,214 units in April-June 2011 from 40,178 units in Q1, 2010.

The company's tractor sales also went up by 20% in Q1 this fiscal to 57,500 units from 47,916 units in the April-June quarter last year, the statement said.

Commenting on the outlook, M&M said: "With headline inflation ranging above 9% for much of the past year, the RBI has tightened its policy stance aggressively in recent months, leading to a sharp rise in loan rates, with inevitable adverse impacts on domestic demand and industrial growth."

However, as the prospects for agricultural and services sector growth remain reasonably robust, the company's business outlook for the year remains positive, but watchful, it added.

Reacting to the numbers, shares of the company closed 1.68% per cent higher at Rs666 apiece on the BSE.


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