If today's lows hold, we might see a short rally
The market opened flat, tracking the Asian peers that were trading lower in the morning on worries of interest rate hikes by countries across the region that have been hit by high inflation. Domestic concerns over the broader implications of the 2G spectrum scam also hurt investor sentiment. The benchmarks touched the day's bottom in late morning trade. A marginal pull-back was noticed after the announcement on easing of weekly food inflation, but the markets continued their southward journey after a brief period.
The realty sector, which was badly bruised yesterday, emerged among the top losers today. The indices made feeble attempts to push up into the green, but came down again on selling pressure and ended lower again today.
We expected the market to bounce today but the Sensex fell 130 points to 17,463, while the Nifty fell 28 points to 5,226. The Sensex opened with a small gap up of 11 points at 17,603, while the Nifty opened with a negative gap of eight points at 5,246. Within half an hour, the indices slipped below yesterday's close and made a new short-term low. It traded within a range for most of the day, never getting anywhere near yesterday's high and the bears prevailed at the end. Today's high-low range was narrower than yesterday's, exhibiting indecisiveness about the next move.
Remember, the monthly picture is weak and the weekly trend is firmly bearish. The daily trend is yet to show any sign of revival. However, there is a slight hope on the intra-day movement. If today's lows hold, we may see a weak rally tomorrow, provided there is no further negative news. The advance-decline ratio on the National Stock Exchange was 564:1148.
The market breadth on the Sensex and Nifty was balanced today. The Sensex closed with 16 losers and 14 gainers while the Nifty had 25 advancing stocks and an equal number of declining stocks. In the broader markets, the BSE Mid-cap index fell by 0.11% and the BSE Small-cap index declined 0.86%.
The top gainers in the sectoral space were BSE Auto (up 0.83%), BSE Power (up 0.82%) and BSE Healthcare (up 0.58%). BSE TECk (down 1.54%), BSE IT (down 1.53%) and BSE Realty (down 1.03%) were the major sectoral losers.
Reliance Infrastructure, which was the top Sensex loser yesterday, recovered today and emerged as the top gainer (up 9.45%). It was followed by Jaiprakash Associates (up 5.25%) and Tata Motors (up 2.37%). State Bank of India (down 3.64%), Bharti Airtel (down 2.80%) and Sterlite Industries (down 2.53%) were the major losers on the index.
Food inflation declined to a seven-week low of 13.07% on 29th January, as prices of potatoes and pulses eased, even as consumers continue to feel the pinch of high prices of vegetables. Food inflation, which snapped a three-week rising trend, fell by nearly four percentage points from 17.05% in the week ended 22nd January. It was 22.08% a year ago.
The last time food inflation came down to such levels was in the week ended 11th December when it was at 12.13%.
Markets in Asia, except the Shanghai Composite, settled in the red for the second day on worries about rising prices and the effect on interest rates. Analysts opined that consumer prices in China are expected to remain high for some months. US Federal Reserve chairman Ben Bernanke's comments last night that unemployment is expected to remain high for some more time also weighed on investor sentiment.
The Hang Seng tumbled 1.97%, the Jakarta Composite declined 1.28%, the KLSE plunged 2.09%, the Nikkei 225 shed 0.11%, the Straits Times declined 1.64%, the Seoul Composite tanked 1.81% and the Taiwan Weighted fell 1.89%. Bucking the trend, the Shanghai Composite gained 1.62% today.
Back home, foreign institutional investors were net sellers of stocks worth Rs609 crore on Wednesday. On the other hand, domestic institutional investors were net buyers of equities worth Rs115 crore.
Government-owned BEML (up 1.05%) has announced plans to invest Rs360 crore for setting up an aerospace manufacturing complex in Bangalore. The company said it is scouting for acquisition of small firms to strengthen this business. The plant, which is expected to become operational in 2012-13, is to come up on a 25-acre plot in the aerospace special economic zone at Devanahally, BEML chairman and managing director VRS Natarajan said today.
Engineering giant Larsen & Toubro (up 0.62%) and Cassidian, a division of leading European aerospace and defence group EADS, have announced a joint venture in defence electronics manufacturing. The joint venture will establish bases of operation at Talegoan, near Pune, and Bangalore. It will be involved in the manufacture, design, engineering, distribution and marketing of systems used in electronic warfare, radars, avionics and mobile systems like bridges for military applications.
Sterlite Technologies (up 5.51%), a leading global provider of transmission solutions for power and telecom industries, has won a third contract for development of transmission systems in the country. The company's wholly-owned subsidiary has been selected to strengthen the transmission grid in the western region on 'build, own, operate and maintain' basis. The project would be commissioned within 36 months and the company would operate and maintain the transmission system for a minimum 35 years.
The number of people affected by bad credit scores has been rather thin as more than half the...
Bank employee unions insist name of grievances cell should be easily understood by common citizens; also push for a special counter for senior citizens
A committee set up by the Reserve Bank of India (RBI) to look into the issues of customer services has agreed to change the name of the Banking Ombudsman to something simpler like the 'Banking Lokpal', which is less of a tongue-twister.
This suggestion was made by the Indian National Bank Employees' Federation (INBEF) to the committee headed by M Damodaran as many customers from rural areas were not familiar with the term ombudsman and would therefore not be forthcoming with their complaints on banking services to the department.
Subhash Sawant, general secretary, INBEF, said, "Many bank customers mainly from rural customers do not understand what ombudsman is all about. When we ask them to file a complaint with the ombudsman, they simply ask us, 'What is ombudsman?' "
The Federation has also suggested that the number of offices of the banking ombudsman be increased. Currently there is only one office that is based in Mumbai and it covers mainly Maharashtra and Goa. It has also asked that a special counter should cater to senior citizens at the branches of all banks, during the first 10 days of every month, as the number of pensioners has increased sharply.
In its reply to IBNEF with respect to its suggestions, the committee said, "The title of the RBI Banking Ombudsman may be changed to a simpler, easily understandable one. The area of operations of the Ombudsman may also be enlarged." In a letter to the Federation the committee also said, "The number of pensioners is increasing. Special counters for pensioners may be considered especially during the first week of every month."
"The committee has agreed in principle to our recommendations. We welcome the response on the matter of senior citizens. About the matter of changing the name of the banking ombudsman, we will know when the report is out," Mr Sawant said.
Other bank unions were also represented along with the IBNEF at the meeting with the Damodaran committee which also discussed issues like clean currency notes, shortage of banking staff and banking-related security.