If the gains continue, the Nifty may touch 5,210
The market ignored weak domestic indicators and took support from the optimism expressed by European policymakers on helping regional banks in a bid to ease the debt crisis that is plaguing the continent. The market closed with gains of 5%, notching its best weekly performance in the last six weeks.
The market closed with good gains on Monday on across-the-board buying from institutional investors. However, it pared those gains and settled flat on Tuesday. Better-than-expected earnings from IT bellwether Infosys lifted the benchmarks on Wednesday.
A volatile trading session with food inflation staying above the 9% mark for the week ended 1st October saw the market closing lower on Thursday. Institutional buying in IT & technology sectors supported the upmove on Friday. Overall, the Sensex added 850 points to close the week at 17,083 and the Nifty settled at 5,132, up 244 points over the previous week. If the gains continue, the Nifty may touch 5,210.
All sectoral gauges closed higher in the week. BSE IT (up 9%) and BSE TECk (up 8% were at the top while BSE Capital Goods (up 2%) and BSE Healthcare (up 1%) ended at the bottom of the list.
The top Sensex gainers were Tata Motors (up 13%), Infosys, Jindal Steel & Power, Wipro (up 9% each) and Bajaj Auto (up 8%). On the flip side, Maruti Suzuki (down 8%) and Coal India (down 4%) were the losers on the index.
The Nifty was led by Tata Motors (up 13%), Infosys, Wipro, Reliance Infrastructure and Bajaj Auto (up 9% each). The major laggards on the index were Maruti Suzuki (down 8%), Coal India (down 4%), Ranbaxy Laboratories (down 3%) and BPCL (down 2%).
India’s headline inflation increased to 9.72% in September from 8.98% a year ago, raising prospects of yet another interest rate hike by the Reserve Bank of India later this month. This is the 10th consecutive month when the rate of price rise has stayed above 9%.
Food inflation eased marginally for the week ended 1st October at 9.32%, but stayed above 9% for the third week in a row, as prices of vegetables, fruit and milk remained expensive, pinching the common man. Expressing disappointment, the finance minister said that it may affect the GDP (Gross Domestic Product) growth for the September quarter.
India’s industrial production grew by a dismal 4.1% in August as high interest rates and gloomy global indicators weighed on factory output. A disappointed finance minister Pranab Mukherjee said the numbers are “not encouraging... it may affect the GDP of the second (July-September) quarter.” For the first quarter, GDP growth was at an 18-month low of 7.7%.
The Society of Indian Automobile Manufacturers (SIAM) has significantly lowered the passenger car sales growth forecast for 2011-12 to 2%-4%, due to lower output at Maruti Suzuki because of labour issues, and higher lending rates.
SIAM had earlier revised the sales forecast for FY11-12 downwards for passenger cars at 10%-12% in July against 16%-18% announced at the beginning of the fiscal.
In international news, Standard & Poor’s has downgraded Spain’s credit rating, citing rising worries over sluggish growth and highlighting the vulnerability of the euro-zone’s bigger economies as the region tries to tackle its sovereign debt crisis.
In a related development, finance ministers and central bankers from the G20 economies are meeting in Paris with the debt crisis in Europe topping the agenda. Pressure mounted amid divisions over whether the euro-zone should take full responsibility for its escalating debt crisis, or whether the rest of the world should help out more.
China’s consumer price index (CPI) increased 6.1% from a year ago, but the number was down from the August reading of 6.2%. The latest inflation figures confirm that Beijing’s efforts to ease rising prices are bearing fruit, and reinforce predictions from market-watchers that the central bank’s tightening cycle is over.
Will China be the next surprise?
In 2008, it was the US; in 2011, it is the US and Europe...
Lavasa Corporation rejected the contention of the environment ministry, dubbing its order as “highly discriminatory and unjust” and its chairman Ajit Gulabchand wanted prime minister Manmohan Singh to intervene
New Delhi: In a fresh blow to Lavasa, the environment ministry on Friday refused to grant green clearance to the first phase of the ambitious hill city project near Pune contending that all the pre-conditions were not met, reports PTI.
Lavasa Corporation rejected the contention of the environment ministry, dubbing its order as “highly discriminatory and unjust” and its chairman Ajit Gulabchand wanted prime minister Manmohan Singh to intervene.
The ministry in its order yesterday said that the Maharashtra government was yet to take credible action against Lavasa for violation of the Environment Protection Act and clearance for the first phase of the 2,000 hectare project cannot be granted.
“As the pre-condition on the credible action on violation of EIA Notification, 2006 has not been complied with, the ministry is unable to issue the environmental clearance to the first phase of Hill City project (2000 hectares) of M/s LCL,” the ministry said.
“The final decision on the environmental clearance cannot be taken till all the pre-conditions are met including credible action by the state government of Maharashtra and subject to the final orders of the High Court of Bombay as the matter is sub-judice,” the order said.
The ministry had laid down five pre-conditions, as suggested by the Expert Appraisal Committee, for Lavasa to comply with before grant of environment clearance.
These conditions include demarcation of land usage which includes open spaces, diverting 5% of its expenses for Corporate Social Responsibility, creation of an Environment Restoration Fund, which in turn will be monitored by a Verification and Monitoring Committee and a submission by the company that violations would not be repeated.
In a statement, Lavasa said it had complied with all the pre-conditions it was supposed to fulfil and that the refusal to give clearance was ‘delaying tactics’.
“To suggest that the state government of Maharashtra has not yet taken action is not a good enough reason for delaying grant of EC, to such a large and important project, under development for last seven years,” the Lavasa statement said.
The first condition related to government of Maharashtra taking credible action against Lavasa for alleged violation of the Environment Protection Act.
The state government had written to the Union environment ministry seeking clarification on the issue citing that the matter was before the high court.
Mr Gulabchand in a letter to the environment minister on 15th June stated that the company had complied with all the pre-conditions except the one linked to the Maharashtra government.
The ministry also refused to accept Mr Gulabchand’s contention before environment minister Jayanthi Natarajan that construction had begun in some other projects prior to obtaining environmental clearance.
It pointed out that while the projects cited by Mr Gulabchand were being built on land sizes between half-a-hectare and three ha, Lavasa project was coming up on 2,000 ha of land.
The ministry’s new order came after Bombay High Court last month directed it to pass the final order on regularisation application of the Lavasa Corporation with regard to constructions at township project near Pune in three weeks.
Mr Gulabchand told reporters it is ready to restructure the Rs 3,000-crore project and would seek the Prime Minister’s intervention to save it.
“Now, our objective is to get clearance, if not from the government, then from the courts and then move forward to restructure the whole project,” Mr Gulabchand told reporters in Mumbai.
Last November, the then Union environment minister Jairam Ramesh had stalled the 2,000-hectare project for causing severe damages to the environment.
The matter is pending with the Bombay High Court since then. The next hearing of the Lavasa case is on 18th October. On 23rd September, the court had directed the Union ministry to pass the final order on the application of Lavasa in three weeks.
Accusing the ministry of using discriminatory criteria in this project by laying down pre-conditions for the first time, Mr Gulabchand said, he is caught between the state government and the Union ministry.
“We have made large investment in Lavasa and losing around Rs 2crore per day, since the past 11 months. The delay will also render 10,000 workers out of jobs. Additionally, 2,000 third-party contracts have also been affected,” he said.
The entire Lavasa project has been mired in controversy with the ministry alleging that required clearances were not taken and the magnitude of environmental degradation caused by construction activities has been too large.
Mr Gulabchand claimed the project has complied with all the pre-conditions it was supposed to fulfil and that the refusal to give clearance is ‘delaying tactics’.