Stocks
Nifty, Sensex weak – Weekly closing report
While Nifty may bounce back during the week, the rallies will be met by selling until Nifty reclaims 8,200
 
We had mentioned in last week’s closing report that Nifty, Sensex are buoyed by global stimulus but that Nifty has to stay above 8,200 for the rally to continue. The rally however, failed to continue and the major indices in the Indian stock markets made losses in every day of the week’s trading. With the US Federal Reserve warning about a possible interest rate hike in December 2015, the bears have taken control. The weekly trends of the major indices are given in the table below:
On Monday, the market failed to maintain its bullish trend and the major indices were found to be moving sideways. A Chinese stimulus, domestic quarterly results and a US decision on a rate hike, coupled with the expiry of derivatives were expected to drive Indian equities markets. As expected, the major indices in the Indian market opened on a higher note, but could not sustain the advantage and retreated to the listless trends of the previous week, leading to the indices closing with small losses.
 
On Tuesday, the indices were in a tight band, with little scope of immediate upswing. Trading volumes were also on the lower side in the Indian stock markets. The indices closed less than 0.50% (down) at the end of the day.
 
Finance Minister Arun Jaitley on Tuesday exuded confidence that the government will achieve the fiscal deficit target of 3.9% in the current financial year. "I have consciously kept this year a very modest target of 3.9%. The manner in which tax revenues and expenditure are moving, I don't think this will be difficult to meet," Jaitley said at the five-day India-Africa Forum Summit (IAFS). He said there was a better collection of revenues during the first six months of the current fiscal, and that he hoped the same for the remaining two quarters of 2015-16. Jaitley ruled out any possibility to slash expenditure either of state governments or that of various central ministries. "I don't think this year we have to cut down expenditure of either state government or public expenditure of the central ministries as it is moving ahead of our target as far as indirect taxes are concerned," the minister said.
 
On Wednesday, the major indices in the Indian stock markets declined sharply. The day’s high of the Nifty was just 8,209.10, showing the struggle to even achieve Tuesday’s low. Bank Nifty fell by as much as 2.43%. Fearing that the US interest rates may go up, based on the US Federal Reserve decision on monetary policy, Indian stock market participants were cautious and there was a fall in the major indices by 0.75%-0.80% at the end of the day’s trading. Foreign funds were net sellers of shares worth $10.87 million.
 
On Thursday, negative global cues from US and Asia led the major indices in the Indian stock markets to a downward trend. The US Federal Reserve decided to leave the interest rates unchanged in its monetary policy meeting for its country. The Fed warned that it may raise interest rates in its December 2015 meeting. This warning adversely affected investor sentiments in Asia and India. The price of the OPEC basket of twelve crudes stood at $43.20 a barrel on Wednesday, compared to $42.40 on Tuesday, up 1.89%. Gold prices fell 1% on Wednesday, in the metal's weakest session in a month, as the market turned lower after the US Federal Reserve left the door open to a possible interest rate hike in December and the dollar hit a 2-1/2-month high. If the US Federal Reserve sticks to its warning in December 2015, the rupee is likely to come under pressure.
 
On Friday, the downward trends of the previous day of the indices continued and the indices closed with small losses. Bank Nifty however, rose by 0.83% to close at 17,354.50.
 
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were:
 

 

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'Round four of coal block auctions likely in 15 days'
The government plans to auction 11 coal blocks in a fourth round of bidding that is likely to start in another 15 days, Coal Secretary Anil Swarup said on Friday.
 
"In another 15 days, about 8 to 11 coal blocks would be auctioned. We have to take a call. There are issues in a few blocks," Swarup told reporters on the sidelines of a conference here.
 
Coal and Power minister Piyush Goyal recently said that preparations for the fourth round of auctions were in the final stages.
 
The first three rounds of auctions as well as allotment of mines, whose previous allotments had been cancelled by the Supreme Court last year, had brought the mine bearing states total revenues of over Rs.300,000 crore.
 
The mines up for auction are all "captive" category, for use by the unregulated sector to manufacture products like cement, aluminium, steel and iron.
 
Though the auction of 10 mines were listed for the third round that took place in August, legal and other issues forced the government to put up only three mines for bidding, leading to the realisation of around Rs.4,300 crore from the last round.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Official audit of discoms 'misguided exercise': Court
 In a setback to the Arvind Kejriwal government, the Delhi High Court on Friday quashed the executive decision to get the books of accounts of the three private power distribution companies (discoms) in the city-capital scrutinised by the Comptroller and Auditor General of India (CAG).
 
A division bench of Chief Justice G. Rohini and Justice R.S. Endlaw said: "There can be no other audit at the instance of state government" as there is already a watchdog, the Delhi Electricity Regulatory Commission (DERC), with powers to audit the accounts of discoms.
 
"All the power of state government relating to electricity now stand vested in DERC," the bench said, slamming Kejriwal's decision to audit the discoms as a "misguided exercise".
 
The high court order came on pleas filed by the three discoms -- Tata Power Delhi Distribution, BSES Rajdhani Power and BSES Yamuna Power -- challenging the Delhi government's January 7, 2014 order to get the CAG to audit their accounts.
 
"The Delhi government, instead of strengthening the DERC, we are constrained to observe, has undertaken a misguided exercise by issuing a direction to the CAG to audit the accounts of the discoms when the report of such audit would not have any sanctity in law for achieving the desired result," the HC verdict reads.
 
"We are unable to decipher anything, which DERC cannot and which CAG can unearth. DERC is neither found to be helpless nor dependent on the balance sheet filed by the discoms," it added.
 
Audit of the discoms under the prevalent legal regime cannot serve the object of bringing down power tariff, "even if were to find that the allegations (of inflating their previous losses) against the discoms to be true", the HC said.
 
The bench said after reenactment of law relating to the power sector and having substituted the powers of the state government with that of the regulator, it was unable to find any purpose which a report of the official auditor will serve under direction of the NCR government.
 
"Once the discoms, before incurring any expenditure above a limit, are required to obtain the prior approval of the DERC, and therefore, once the DERC approves the said expenditure, we fail to see how the CAG can be allowed to arrive at a different conclusion," the bench said in its 139-page judgment.
 
The discoms, which supply power to consumers in the capital, argued that they were private companies and hence not in the ambit of such an audit. They alleged that the Delhi government's order was a "political ploy" and was passed with "malice in law" without giving them an opportunity to be heard.
 
A draft report in August after the CAG's audit into their books had reportedly said they inflated their previous losses.
 
The three private firms had come into being in 2002 when the then Delhi government decided to privatise power distribution. Delhi discoms are a 51:49 percent joint venture between the private companies and the Delhi government.
 
The Arvind Kejriwal government had argued that a CAG audit of private discoms was necessary to clarify alleged anomalies in their accounts and that it was not aimed at interfering with their functioning.
 
Reacting to Friday's decision, AAP legislator Saurabh Bhardwaj said the official auditor had already probed the books of these three companies and had found discrepancies.
 
"I think all of you know that CAG audit is already over and it came to be known that the power discoms duped the people of Delhi of around Rs.8,000 crore."
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Umesh kaushik

1 year ago

Audits are not fool proof, case in point, Enron, Satyam, Worldcom, and many more. There is a requirement of CAG audit which by and large remains immune to any influence on account of protection provided by Constitution Of India.

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