The weaker-than-expected growth in the US jobs market points out to a slowdown in the global economy
The domestic market is likely to open lower tracking their weak Asian bourses on the back of disappointing jobs data in the US, renewing concerns about the pace of the global economic growth. Markets in the US settled lower on Friday on weak jobs data, sending the Dow to its longest streak of losses since 2004. The SGX Nifty was 42 points lower at 5,492 compared to its previous close of 5,534.
A slew of positive economic indicators helped the market end with a gain of 1% last week. A rise in exports, the growth in six core sector industries in April and easing of food inflation for the week ended 21st May, supported the gains.
On the first trading day of the week, the market closed flat with a negative bias, weighed down by weak corporate results. Ignoring the marginally slower GDP growth for the last fiscal, the market continued its uptrend and closed higher on Tuesday. It expanded its gains on Wednesday on positive economic indicators. The rally lost steam and closed lower on the last two days. The Sensex settled 110 points higher at 18,376 and the Nifty added 41 points to close the week at 5,517.
Overall, the uptrend in the market is still continuing with the resistance on the Nifty at 5,620. However, if the market falls in the near future, the first support lies at 5,435.
While the progress of the south-west monsoon is seen as a positive factor, the possible hike in diesel and domestic cooking gas price will act as a spoilsport.
Wall Street closed in the red on Friday as the weak jobs data questioned the pace of growth in the world’s biggest economy. Employers in the US added only 54,000 new jobs in May, the lowest in eight months and below analysts’ expectations, while the unemployment rate inched up to 9.1% in the month from 9% in April.
The Dow declined 97.29 points (0.79%) to settle at 12,151.26. The S&P 500 shed 12.78 points (0.97%) to 1,300.16. The Nasdaq Composite slid 40.53 points (1.46%) to 2,732.78.
Most markets in Asia are closed for local holidays today but those that are open were trading with losses in early trade on Monday. The lower-than-expected US jobs growth in May suggested a slowdown in the world economy. The development is likely to add to the selloff seen recently in the bourses across the region.
The Jakarta Composite was 0.42% lower, the KLSE Composite declined 0.35%, the Nikkei 225 slipped 0.94% and the Straits Times fell by 0.47%. Markets in South Korea, Hong Kong, China and Taiwan are closed for public holidays.
Back home, the Mukesh Ambani-led Reliance Industries (RIL) faces the risk of losing its long-held stock market bellwether position, as its share performance has been below-average for many months now, experts have warned.
The stock enjoys the maximum weightage in the Sensex and a rise or fall of 1% in its share price can lead to a surge or plunge of nearly 20 points in the benchmark index. RIL shares have fallen by nearly 7.5% in the past one year, even as the Sensex has gained about 1,259 points or 7.5% over the same period.
The two had been accused of making unlawful gains of over Rs4.94 crore by cornering shares of various companies meant for retail individual investors and the penalty is three times of the amount
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) on Friday imposed a penalty of Rs14 crore on Dushyant Natwarlal Dalal and Puloma Dushyant Dalal, the two financiers for unlawful gains made during the infamous initial public offer (IPO) scam of 2003-05, reports PTI.
The two had been accused of making unlawful gains of over Rs4.94 crore by cornering shares of various companies meant for retail individual investors and the penalty is three times of the amount.
“...considering all the said facts, it is felt that a consolidated penalty of Rs14 crore on the noticees (Dushyant Natwarlal Dalal and Puloma Dushyant Dalal), which is approximately three times of the unlawful gains made by them, shall be commensurate with the violations committed by them,” SEBI said in an order.
The two have been directed to pay up the penalty within 45 days either jointly or individually.
The Dalals had been charged with being financiers to two key operators—Sugandh Estates and Investments Pvt Ltd and Purshottam Budhwani.
The key operators had allegedly opened large number of demat accounts in the name of non-existent persons or name lenders and acquired shares of various companies by making applications in fictitious names.
The key operators subsequently transferred these shares through off-market deals to ultimate beneficiaries who had acted as financiers.
The Dalals were charged with being parties to such unlawful act of cornering shares and acting in connivance with others to make unlawful gains at the cost of other individual investors.
IPOs of major firms like IL&FS, IDFC, FSC Software Solutions, Gateway Distriparks, Provogue, MSP Steel, Nectar Lifesciences, Shoppers Stop and Suzlon were targeted by the two key operators the Dalals had connived with.
SEBI said: “... the noticees provided an aggregate of about Rs85 crore towards subscription of these IPOs without any security and documentation. They received back the money in cash or in kind (i.e. by way of shares).”
It said that the manner and movement of shares and funds transferred clearly indicate that the transactions were not “normal lending”.
“...there is no doubt that the noticees cornered the shares meant for retail and individual investors and in the process, deprived them of their rightful allotments in the said IPOs,” SEBI said.
“The facts and circumstances of the case... do confirm that the noticees acted in collusion with others in cornering shares meant for retail investors and made unlawful gains to the tune of Rs4,94,19,379...,” it added.
The IPO scam of 2003-05 refers to cornering of shares by some brokers reserved for retail investors in the public issues of certain public offers, including IL&FS, TCS, Yes Bank, Shoppers Stop, through fictitious multiple demat accounts.