The Ambani brothers wield so much clout not just in business and political arena but on the markets, as well. Today, wild “rumours” were spread that the Ambani siblings—Mukesh and Anil—would be patching up and the markets shot up in what would be characterised as a dull trading session
No, we are not talking about the Reliance Power Company. We are talking about how much power the Ambani family has. Today, wild “rumours” were spread that Mukesh Ambani of Reliance Group and Anil Ambani of the ADAG Group would be patching up and the markets shot up in what would be characterised as a dull trading session. The Sensex was hovering around at 15,755 at around 2.26 pm, before the rumour machine kicked in and propelled it up to 15,978, a rise of over 220 points within a span of just 16 minutes! That is a whopping 1.42% upside move in a short timeframe. People close to the family who knew of the “rumour” beforehand would have pocketed a tidy sum of money, at the expense of the small investor who had no idea of this move.
What does this finding tell us? Simple. The Ambani brothers wield so much clout not just in business and political arena but on the markets, as well. For instance, Mukesh Ambani had bailed out the TV18 Group, cleaned up its debt-ridden balance sheet, and effectively taken control of the media conglomerate. In this case, the rumour would have only helped the Anil Ambani group whose stocks shot up 5-7%. Immediately, thereafter denial came and the market slumped back.
Will the Securities & Exchange Board of India (SEBI) check who traded the most before the rumour spread like wildfire? Rumour-mongering has been an old trick of the Ambanis and this episode shows, very little has changed.
Events would decide the market’s move next week
The market closed flat with a positive bias today on buying support in select blue-chips in the last hour. The 20-day moving average on the Nifty was 4,709. At present the index is in an indecisive phase. The benchmark made a lower low today, however, towards the end of the day it made higher high on a volume of 53.95 crore shares on the National Stock Exchange (NSE).
The market opened in the negative, taking cues from the disappointing start by the Asian pack on unending European woes and a weak euro. Concerns about lower quarterly earnings by corporates also weighed on the investors. The Nifty opened 26 points down at 4,724 and the Sensex lost 68 points to 15,789 at the opening bell. Auto, consumer durables, fast moving consumer goods, and IT stocks faced intense selling pressure in early trade.
Shares of Kingfisher Airlines plunged over 11% in morning trade after State Bank of India (SBI), the company’s largest creditor, declared its exposure to the air carrier a non-performing asset. After a weak start, the stock fell further to an early low of Rs18.15, down 11.24% over the previous close, on the NSE. On the BSE, the stock fell 10.75% to an early low of Rs18.25.
The sell-off led the indices to the day’s low in mid-morning trade. At the lows, the Nifty fell to 4,687 and the Sensex went back to 15,665. The market was range-bound in till around 2.15pm, after which select buying pushed the benchmarks into the positive. The indices hit their highs in the last hour with the Nifty rising to 4,795 and the Sensex going up to 16,001.
However, choppiness in late trade saw the indices coming off the highs and closing flat for the second day. The Nifty closed four points higher at 4,754 and the Sensex settled at 15,868, up 11 points.
The advance-decline ratio on the NSE was in favour of the declining stocks at 688:717.
In the broader market space, the BSE Mid-cap index shed 0.09% while the BSE Small-cap index rose 0.02%.
The sectoral gainers were BSE Oil & Gas (up 1.06%); BSE Fast Moving Consumer Goods (up 0.87%); BSE Bankex (up 0.49%) and BSE Healthcare (up 0.06%). The top losers were BSE Capital Goods (down 1%); BSE Realty (down 0.87%); BSE TECk (down 0.78%); BSE Power (down 0.69%) and BSE Consumer Durables (down 0.60%).
Reliance Industries (up 2.52%) was the top gainer on the Sensex today. It was followed by HDFC Bank (up 2.25%); Hindalco Industries (up 2.02%); Maruti Suzuki (up 1.76%) and ITC (up 1.23%). The key losers were Hero MotoCorp (down 5.12%); Jaiprakash Associates (down 4.58%); Bharti Airtel (down 4.11%); Jindal Steel (down 3%) and DLF (down 2.65%).
The top performers on the Nifty were Reliance Communications (up 5.43%); Reliance Infrastructure (up 4.31%); BPCL (up 4.17%); Reliance Power (up 3.81%) and HDFC Bank (up 2.67%). Hero MotoCorp (down 5.56%); JP Associates (down 4.75%); Bharti Airtel (down 4.01%); Jindal Steel (down 3.23%) and DLF (down 2.97%) led the losers.
Markets in Asia closed lower on European worries and ahead of monthly jobs data from the US, slated to be announced later today. Chinese stocks gained on speculations that the government will ease lending restrictions. The Seoul Composite index fell over 2% in intraday trade on rumours of a possible downgrade of France’s sovereign rating.
The Hang Seng declined 1.17%; the Jakarta Composite fell 0.94%; the KLSE Composite shed 0.02%; the Nikkei 225 tanked 1.16%; the Seoul Composite dropped 1.11% and the Taiwan Weighted shed 0.15%. Bucking the trend, the Shanghai Composite gained 0.70% and the Straits Times rose 0.09%. At the time of writing, the key European markets were trading with gains of 0.25% to 0.63% and US stocks futures were trading higher.
Back home, foreign institutional investors were net buyers of stocks totalling Rs381.42 crore on Thursday while domestic institutional investors were net sellers of shares amounting to Rs289.21 crore.
Suzlon Energy arm REpower has won an order from a wind farm in Portugal. The company will supply 11 turbines to the wind farm in Central Portugal that will generate 22 MW power. The project is scheduled to be commissioned in the third quarter of fiscal 2013, Suzlon Energy said on Friday. The stock gained 0.27% to close at Rs18.30 on the NSE.
Aditya Birla group firm Idea Cellular today approached telecom tribunal TDSAT against the government’s move to impose additional liquidated damages on it for not meeting roll-out obligations in two circles. Idea said the additional penalty has been imposed for the Haryana and Maharashtra circles, for which the main penalty has already been set aside by TDSAT on 5th December. The stock ended flat at Rs82.45 on the NSE.
Kolkata-based Srei Infrastructure Finance plans to raise around Rs1,400 crore of debt in the current quarter to support its growth, a top company official said. The NBFC engaged in financing infrastructure projects had decided to mop up Rs300 crore through a bond issue which opened for subscription on 31st December and will close on 3st January. The stock declined 2.80% to close at Rs26 on the NSE.
Noting that India has strong fundamentals, like a vast number of technically competent professionals and managers, besides 60% of its population being young, finance minister Mukherjee said he had no doubt that India will come back to a strong growth trajectory by 2020
Chennai: Finance minister Pranab Mukherjee today said the fiscal deficit for 2011-12 could be more than the projected figure, reports PTI.
Observing that India’s fiscal deficit rose to 6.5% in 2008-09 due to the global financial crisis, he said in 2009-10 it was brought to 4.5%.
“But unfortunately, the fiscal deficit may be more in 2011-12 than projected,” he said while delivering his address at a three-day international conference organised by the Institute of Chartered Accountants of India here.
In the Budget, the fiscal deficit was projected at 4.6% of the GDP. Fiscal deficit is the difference between the total expenditure and the total revenue.
“India hoped to register a 9% (plus or minus 0.25%) growth in GDP (gross domestic product) during 2011-12,” he said.
The Eurozone crisis and slow progress in other parts of the world has also affected India, he added.
“I cannot claim that we have been insulated from the crisis in Europe. It does affect both the developed and under developed economies,” Mukherjee said.
Noting that India has strong fundamentals, like a vast number of technically competent professionals and managers, besides 60% of its population being young, Mr Mukherjee said he had no doubt that India will come back to a strong growth trajectory by 2020.
“With these strong fundamentals, I have no doubt that we will overcome the shortcomings and come back to the path of higher growth trajectory,” he said.