Sensex, Nifty at a crucial juncture: Weekly Market Report
The benchmark indices may find it tough to record significant new highs. However, the first sign of weakness will come only if Nifty closes under 7,700
Last week (closed on 8th August) we had mentioned that the NSE's CNX Nifty and S&P BSE Sensex may try to make gains. This week opened on a positive note with a huge gap up on Nifty which it managed to retain for the session on Monday. The  Sensex closed the week that ended on 14th August at 26,103 (up 774 points or 3.06%), while the Nifty ended at 7,792 (up 223 points or 2.95%). 
On Monday, Nifty closed at 7,626 (up 57 points or 0.76%). The Reserve Bank of India said on Sunday the 9th August that its board has approved the transfer of a surplus profit of Rs52,679 crore to the government for the year ended June 2014. This compares with a surplus transfer of Rs33,010 crore last year. Market regulator SEBI on Sunday had approved a long-pending proposal to introduce real estate investment trusts, a move to give cash-strapped developers easier access to funds.
The optimism on the bourses continued on Tuesday as well. After a range bound move for most of the session, the indices shot up to hit the day’s high and closed almost at the same level. Nifty closed at 7,727 (up 101 points or 1.33%), highest gains since 30 June 2014. Rainfall forecast for India has been lowered to 87% of the long-period average from 93% earlier due to a slow start to the season, the earth sciences minister said. India's industrial production during June was at 3.4%, weaker than the 5% expansion in May, while retail inflation in July based on the combined consumer price index for rural and urban India was at 7.96% compared with 7.46% a month ago.
Weak data of July consumer price inflation and June factory output given after-market hours on Tuesday affected the market sentiments on Wednesday. And the positive move on Wednesday was further weakened by the data coming from Japan which showed the economy contracting sharply in the second quarter and China's industrial production slowing slightly in July. Nifty closed at 7,740 (up 13 points or 0.16%).
Nomura has raised the BSE Sensex target to 30,310 by end of August 2015. Commerce and Industry Minister Nirmala Sitharaman said on Wednesday that the NDA government will not 'entertain' foreign direct investment in multi-brand retail. The Indian government said it will come out with a new natural gas pricing formula by 30th September keeping in mind the interest of investors and public.
Nifty resumed its upward journey on Thursday managing to keep itself above Wednesday’s close for most of the session.  Weaker-than-expected US retail sales data reinforced the view that the Federal Reserve won't rush to raise rates. Nifty closed 7,792 (up 52 points or 0.67%).
The annual rate of inflation based on monthly WPI eased to 5.19% for July 2014, from 5.43% for June 2014. Meanwhile, the government revised upwards WPI inflation for May 2014 to 6.18% from 6.01% reported earlier.
The market remains shut on Friday for India's Independence Day.
For the week, among the other indices on the NSE, the top two performers were Auto (5%) and Finance (4%) while the worst two performers were Media (3%) and Realty (1%).
Among the Nifty stocks, the top five stocks for the week were Tata Motors (12%); HDFC (9%); BPCL (8%); Sesa Sterlite (8%) and Mahindra & Mahindra (8%), while the top five losers were Bhel (4%); Hero MotoCorp (3%); Hindalco (3%); Bharti Airtel (2%) and State Bank of India (2%).
Of the 1,509 companies on the NSE, 637 companies closed in the green, 838 companies closed in the red while 34 companies closed flat.
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were:


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Here is what will come in the way of Modi to hit his infrastructure targets

The Prime Minister is set to announce highly ambitious targets for power, road, coal etc. Will he succeed?


Prime minister Narendra Modi would review performance of all ministries related with infrastructure in first week of September, say media reports. During the review meeting, the union government is also set to revise targets for nine infrastructure ministries, power, road transport, shipping, civil aviation, coal, petroleum, railways, telecom and renewable energy.


Last month, the PM met with secretaries of these ministries to review targets of each ministry. During the meeting, Sindhushree Khullar, secretary of Planning Commission, made a 15-page presentation on performance of core infrastructure ministries during 2013-14 and the targets for FY15. According to CNBC TV18, Modi has fixed ambitious targets for each of the sectors. Are these targets feasible? What are the impediments to achieving them?


Coal production: 562mt vs 463mt of last year. Target: 21.4%+


Against the target of 483 million tonnes (mt), the coal production in India actually reached only 463 million tonnes last year. Part of it was attributed to the cyclone Phalin and the monsoon flooding. Progress has been hampered by land acquisition problems and dealing with environmental clearances and so, the chances of reaching a target of 562 million tonnes seems remote.


State-run Coal India Ltd (CIL), the world's largest coal miner, sits on the world's third largest estimated reserves of coal, in the region of some 250 billion tonnes and yet fell 20mt short of its mining target of 482mt in 2013-14. Coal India directly controls, as a holding company, seven collieries and produces 85% of the fuel mined in the country.

According to media reports, over 60,000 mining clearances are pending with various State Governments. Karnataka heads the list with 19,497, followed by Rajasthan at 13.893, erstwhile Andhra Pradesh 7,691, Madhya Pradesh 4,680, Gujarat at 4,517, and Jharkhand at 4,409. Indian mines need to be modernised too.


Narendra Singh Tomar, Minister of Mines, Steel and Labour therefore, faces the enormous task of clearing all these 63,395 mineral concession applications which are pending with various State Governments. In sorting out the mess, several ministries are involved. How can the Government go about doing this huge task?


Rural Electrification: FY15 15,000 villages against 12,468. Up 20%


During FY15, the government plans to cover 15,000 more villages under the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) project. This is an increase of about 20% compared with last year's coverage of 12,468 villages. How easy is this? Given that the government is cash-strapped, it remains to be seen how this would be achieved.


Road project target for FY15 8,500kms against 3169kms. Up 67%


This is one of the most ambitious targets of the Modi government. During FY15, the union government is planning to award projects of 8,500kms of road length. Last year, road projects for only 3,169kms were awarded as against a target of 9,683kms. The main reason was lukewarm response from bidders, problems of land acquisition and failure of public-private partnership (PPP) mode during 2012-13 and 2013-14.


During 2013-14, National Highways Authority of India (NHAI) had awarded 17 projects for a total length of 1,435.84kms of which two projects are on PPP mode. About 21 projects were bid out by NHAI through PPP mode, but none of the projects received any response.


Minister for Road Transport, Highways and Shipping Nitin Gadkari has said that he is trying to take forward road construction projects worth over Rs1.80 lakh crore rupees that are now being stalled by removing various hurdles. Gadkari said there have been huge Non-performing Assets (NPAs) in the banks relating to such road projects amounting nearly to Rs2.40 lakh crore. So, where will the new funding come from, to even complete stalled projects?


In all, the Modi government has set very ambitious targets for the infrastructure sector. Unfortunately, the government can no longer do it. It has no money, no expertise and no accountability. Who will do it, then? The sector is full of debt-laden businesses, run by crony capitalists. Public sector banks are weighed down by bad loans given to infrastructure companies. Where will Modi find additional money to pour into infrastructure? That apart, the rules set by the earlier regime that have hobbled infrastructure companies remain. There have to be fundamental changes in law, bidding process, monitoring and so on. Unless such changes happen, targets set from the ramparts of Red Fort will mean nothing.




2 years ago

Agree, there is a huge lack of competence and resources in the Indian infrastructure sector which is known all over the world.

The methods are simple - PPP projects inflate the project cost by 3-4x, obtain debt from the banks, and pocket the money. The quality of work is so pathetic that projects that last 50+ yrs in other countries do not last even 5 yrs. When things become really bad, user charges are hiked by an accommodating minister, and some small improvements are made.

There is a way out - Modi should prosecute these crony capitalists and their friend politicians, attach their properties to recover part of the money pocketed, and use it to take a 25% stake in fresh projects, to be owned and operated by a select list of globally reputed companies on Build Own Operate Transfer basis as practiced by several Middle East countries.

At the end of 5-7 yrs (not longer) the govt should buy back the foreign companies stake at depreciated cost & only contract out the operations.

The private ownership of pu8blic assets has only created higher prices, crony capitalism & poor quality of service. Clearly, indian companies do not have it in them to be allowed to own monopoly assets and maintain standards.

The practice can be reviewed 10 yrs later, when some mature and business-like indian groups emerge. The first flush of andhrapreneurs that thrived only on political patronage & wrongdoing should close down by then

Abhishek Chandra

2 years ago

The author says that the Modi government has no expertise, and I disagree entirely. While Modi has had considerable experience in running Gujarat, there are plenty of national level leaders in the NDA as well.

Please spare me the "India is not Gujarat". I would like to point out that Gujarat is India, and Modi literally modified Gujarat.


2 years ago

The main problem for Infrastucture and Industrialisation is Land Aquisition. The various Industrial Belts like Thane Belapur Road, Pimpri-Chinchawad, Khopli and numerous others, developed because the Government procured the Land for Industries/Industrial Estates,provided Electricity, water and Road connections and offered such readymade plots for setting up Industry. Today if the Navi Mumbai airport project is held up because of Land Aquisition (Farmers demanding totally exorbitant prices) one can imagine the plight and future of the Private Parties trying to procure land for their Projects.


2 years ago

India managed to create a 350 million strong middle class from mostly poor, undereducated families, with govt. and philanthropist subsidized education while facing huge problems: colonization and the resulting illiteracy, poverty, food shortage, regular US supply of free arms to Pakistan, etc.

India's only internal problem is its huge overpopulation and the solution has to come from citizens.

Anyone who aspires to be well-off should not have children, unless s/he has the wherewithal to support them nicely. A child's rights come first, not some silly wish to propagate your name or think it is a duty (!) to breed. In any case, the world is packed with unwanted kids, why produce more?

Everyone's duty is to NOT breed unless you really want kids, at least one of you is prepared to be there full time for raising them and ample resources, both human and material.

Poor people do NOT have the right to bring children into horrific misery and destitution.

Reduce India's population and watch progress, a reduction in scarcity and hence corruption. deal with today but plan intelligently for the nation's future.


Praveen Sakhuja

In Reply to bharati 2 years ago

Bharti I agree with U first we should supporting devices then think of other aspects. Still India has population which has sex as an entertainment but results in increase in population leaving the born to starvation [see our roads flooded with beggars. This problem can only be over come with the efforts of government machinery which is located in every corner of country.


2 years ago

If someone credits everything to that happened in Gujarat to NaMo, is difficult to agree. Gujarat has been a rich state and people are industrious, so it was easier for him to carry out one man show. But India is not Gujarat, it is beyond Gujarat.


Praveen Sakhuja

In Reply to ALEX JACOB DMELLO 2 years ago

Alex is right in saying India is not Gujrat, It is small part of India. I had once suggested to PM that he should educate his team to shun out using Gujrat and Modi sarkar in every sentence being uttered. Instead they say other state (s)[similar to gujrat] and our sarkar. It may pinch few for that pardon me.


In Reply to ALEX JACOB DMELLO 2 years ago

So presumably Gujarat was doing just as well and had ample access to power, fertilisers, storage facilities, etc. ? Of course not. You may dislike someone's religion, but no harm in giving due credit.

Bharat parikh

2 years ago

IF Namo can't do that then who else can do that, He already proved himself in Gujarat against all odds so let us give him time.
So shradha & saburi is the Key for achhe Din ane wale hai
Jai Bharat

Praveen Sakhuja

2 years ago

Modi can achieve the targets set to be achieved in every field provided his team supports with every inch of their heart. Selfish partners will pull all hindrances for achieving the targets.

Rakesh Goyal

2 years ago

Set a target and achieve it - is success.

Set a a target and exceed it - is excellence.

Set a target and do not achieve it even by 1% is failure.

All these targets can be achieved only if there is competence, motivation and honesty. Mere intentions do not produce results.

Paul dmello

2 years ago

It is great to hike project expectations but same needs Tao be balanced with funds at hand and capacity to make extra funds available. Also need Tao weed out corruptions which siphon funds away.

Madhur Aggarwal

2 years ago

Moneylife keep it that way.
Liked the article.

State the Ground realities as they are.

We need news and journalism of depth and realism , away from high claims of these political parties,

Main Q in India of 2014- Will BJP deliver ?

This news confirmed that
BJP - Achche Din seems less implemntation on ground .
Collision course for Indian people .
Netao ka kya jaaega ????



In Reply to Madhur Aggarwal 2 years ago

A democracy succeeds only if its PEOPLE cooperate, sacrifice where needed and work to ensure progress.

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