Where there is extremely high level of demand and resources are scarce, for instance spectrum, then there is no logical reason why it should not be auctioned,” CCI chairman Chawla told reporters. He, however, added, “Auction cannot be a panacea for everything (all other natural resources) and there will have to be some calibration”
New Delhi: There is “no logical reason” as to why scarce resource like spectrum should not be auctioned, Competition Commission of India (CCI) chairman Ashok Chawla, who headed a high-level panel on allocation of natural resources, said on Sunday.
“Where there is extremely high level of demand and resources are scarce, for instance spectrum, then there is no logical reason why it should not be auctioned,” Mr Chawla told PTI in an interview.
However, the former finance secretary added, “Auction cannot be a panacea for everything (all other natural resources) and there will have to be some calibration”.
The Chawla-headed committee had submitted a report on allocation of natural resources to the government last May.
While he supported the revenue-generating auction route for telecom radio waves, his views on other natural resources, are in sync with the contention made by the government in the review petition filed before the Supreme Court.
The apex court had cancelled 122 licences awarded to telecom service providers in 2008 and said that allocation of natural resources should be done through auction route.
Mr Chawla said, for resources in sectors like education and health the auction route cannot be adopted since there is an important social objective involved.
He further said that transparency in awarding the contracts or licences—whether or not through auction—is the key. The awards of the contracts should be based on “certain rule-based framework...well articulated and known to the people”.
He said most of the policies are done though executive framework which is “not grounded in any kind” and the rules can be interpreted in different ways.
Asked whether bureaucrats are responsible for the opaque rules, Mr Chawla said, “You can, of course, blame bureaucrats or anybody, but in such matters they have limited power and authority because ultimately it is the decision of the political executive either in the ministry or in a cabinet committee or the Cabinet”.
It would be interesting to see whether the bulls are able to shrug off the bears this week as normally running corrections do not last for more than two consecutive weeks. If it does then the bulls will be once again firmly in the saddle otherwise we could see this correction continue for a couple of weeks more
S&P Nifty close: 5359.40
Short Term: Sideways Medium Term: Up Long Term: Down
The Nifty opened marginally better but crashed to almost touch the S2 level of the week on the very first day of trading. Subsequently a recovery was seen for a couple of sessions before selling pressure saw it give up some of these gains as the Nifty closed the week with a loss of 1.29%. The sectoral indices which outperformed were BSE Healthcare (+2.01%) and BSE PSU (+0.78%) while the gross underperformers were BSE Reality (-4.64%), BSE IT (-3.04%) and BSE Auto (-1.73%).
The weekly histogram MACD moved down but is above the median line indicating that a correction is on. As we had envisaged last week the correction in the Nifty is now a couple of weeks old and it would be interesting to see whether a small pullback materializes from lower levels. Volumes were lower as compared to the previous week during the decline which also supports the correction theory as of now.
Here are some key levels to watch out for this week
■ As long as the S&P Nifty stays below 5,362 points (pivot) the bears hold a slight edge in the near term even though the intermediate trend remains up.
■ Support levels in declines are pegged at 5,265 and 5,171 points.
■ Resistance levels on the upside are pegged at 5,456 and 5,552 points.
1. The Nifty came near the 61.8% retracement of the entire fall from 6,338-4,531 points, pegged at 5,648 points from where it declined.
2. Despite the sharp rise the weekly averages still continue to be negatively phased. It would be interesting to see whether prices find support around these levels in further declines.
3. 5,231 points is the 38.2% retracement level of the rise from 4,588-5629 points, hence expected to provide support. A fall below this could see the Nifty dip to the 5,050-5,150 area where strong support is envisaged.
As expected the Nifty continued its decline for the second week. It would be interesting to see whether the bulls are able to shrug off the bears this week as normally running corrections do not last for more than two consecutive weeks. If it does then the bulls will be once again firmly in the saddle otherwise we could see this correction continue for a couple of weeks more. In this scenario the Budget and the election results will become redundant. At this moment the previous week’s high and low should be watched carefully as a close above/below this would decide the direction in the near term.
(Vidur Pendharkar works as a consultant technical analyst & chief strategist, at www.trend4casting.com)
Nifty to close above 5,460 for uptrend to resume
Concerns about the slowdown in the economy, signalled by a fall in GDP numbers for the December quarter and a marginal decline in factory output in February weighed on the investors. Apprehensions about the Union Budget which will be announced by the finance minister on 16th March also added to the woes. The market settled lower for a second week in a row, after having rallied for seven weeks earlier.
At the end of the week, the Sensex settled 287 points lower (down 2%) at 17,637 and the Nifty fell by 70 points (down 1%) at 5,359. A close below 5,300 may see the Nifty falling to the level of 5,270. However, if it manages to break through 5,460, we may see Nifty rising to 5,575.
Fears of higher inflation making a comeback on the back of rising oil prices led the market down on Monday. However, value buying after the previous day's sharp decline led the benchmarks higher on Tuesday. The market settled flat with a positive bias on Wednesday as the country's GDP for the December quarter came in below expectations.
Worries about the lower economic growth, coupled with a marginal decline in factory output for February, pushed the market lower on Thursday. Late buying in select blue-chips ensured the positive close on Friday, amid a choppy session.
The BSE Healthcare index (up 2%) was the sole sectoral gainer while BSE Realty (down 4%) and BSE IT (down 3%) were the top losers in the week.
The top Sensex gainers were Sterlite Industries (up 5%), Sun Pharma, Maruti Suzuki (up 3% each) Bharti Airtel and State Bank of India (up 2% each). The key losers were DLF (down 10%), Mahindra & Mahindra (down 7%), Hero MotoCorp (down 6%), TCS and Jindal Steel & Power (down 4% each).
The Nifty was led by ACC (up 6%), Reliance Infrastructure, Ambuja Cements, Sterlite Ind (up 5% each) and Maruti Suzuki (up 4%). The laggards on the index were DLF (down 10%), M&M (down 7%), Sesa Goa, Hero MotoCorp (down 6% each) and TCS (down 4%).
India's economic growth rate slipped to 6.1% in the third quarter the current fiscal, the lowest in more than two years. GDP in April-December period also moderated to 6.9% from 8.1% in the first nine months of 2010-11. Expressing concerns over the dip in third quarter GDP figures, India Inc said the country's economic growth rate may even fall below the projected 6.9% in 2011-12.
India's exports grew by 10.1% year-on-year in January to $25.34 billion despite weak demand in the Western markets. However, imports grew at a faster rate of 20.25% to $40.1 billion, leaving a trade deficit of $14.76 billion. From a peak of 82% in July 2011, export growth has slipped to 44.25% in August 2011, 36.36% in September 2011, and 10.8% in October last year.
India's manufacturing sector growth slowed marginally in February, although strong domestic orders were likely to support output expansion in the coming months, an HSBC survey has said. The HSBC India Manufacturing Purchasing Managers' Index (PMI)-a measure of factory production-eased to 56.6 in February as against 57.5 in January owing to a moderation in sequential output growth.
On the international front, European Union leaders have cleared the release of long-awaited second bailout package for debt- ridden Greece by the end of the week. This is to enable Greece avoid a default on paying back 14.5 billion euro debts due on 20th March. Finance ministers of the euro group, during a two-day meeting in Brussels on Thursday, kicked off the preparations to release the first tranche of the 130 billion euro rescue package.
Meanwhile, Ratings agency Moody's late Friday downgraded Greece to the lowest rating on its bond scale to 'C' from 'Ca', following a deal with private investors that would see them ultimately lose 70% of their holdings in Greek debt. Ratings agency Standard & Poor's took similar action on 27th February.