For Nifty to reverse its downtrend, it has to close above 5,940. All eyes are on the RBI's policy announcement due on Tuesday
The market settled near the lows of the day on selling pressure from FMCG, PSU and metal stocks. If the Nifty manages to close above 5,940, we may see the benchmark making some gains. The National stock Exchange (NSE) reported a turnover of 52.06 crore shares and advance-decline ratio of 407:916.
The Indian market opened lower on cautiousness ahead of the Reserve Bank of India’s (RBI) quarterly policy review and sluggishness in the Asian markets. While the Indian central bank will announce its policy review on Tuesday, analysts opine that there will not be any revision in key interest rates.
The Nifty opened 16 points lower at 5,870 and the Sensex started the day at 19,714, down 34 points from its previous close. Select buying saw the benchmarks hitting their highs in initial trade itself. The Nifty touched 5,886 and the Sensex inched up to 19,751 at their respective highs, though in the negative terrain.
Meanwhile, the rupee was trading 13 paise lower at 59.17 against the US dollar in early trade on the back of the weakness in the equity market and month-end dollar demand from importers.
The market trended lower in morning trade on selling pressure in fast moving consumer goods (FMCG), PSU, capital goods banking and realty stocks. However, the indices pared their losses in noon trade on support from IT, technology and auto stocks.
The indices resumed their southward journey in the late noon session on selling pressure in FMCG and metal sectors. The market touched its lows towards the end of the trading session with the Nifty at 5,826 and the Sensex falling to 19,571.
The market finally settled near the intra-day lows. The Nifty closed 55 points or 0.93% down at 5,832 and the Sensex ended the day at 19,593, a fall of 155 points or 0.78%.
The broader indices too settled lower. The BSE Mid-cap index fell 1.31% and the BSE Small-cap index fell 0.86%.
BSE IT (up 0.77%); BSE Auto (up 0.36%) and BSE TECk (up 0.15%) were the only sectoral gainers while BSE FMCG (down 2.67%); BSE PSU (down 1.80%); BSE Metal (down 1.80%); BSE Realty (down 1.65%) and BSE Bankex (down 1.20%) were losers.
Out of the 30 stocks on the Sensex, 10 stocks settled higher. The main gainers were Wipro (up 6.71%); Jindal Steel (up 4.89%); Tata Motors (up 2.14%); Sun Pharma (up 1.91%) and Hero MotoCorp (up 0.49%). Hindalco Inds (down 4.03%); Hindustan Unilever (down 3.71%); Sterlite Inds (down 3.66%); Dr Reddys Lab (down 3.53%) and Coal India (down 3.19%), were the top losers today.
The top two A Group gainers on the BSE were— Wipro (up 6.71%) and Prestige Estates (up 5.02%).
The top two A Group losers on the BSE were— Wockhardt (down 9.99%) and Indian Bank (down 7.40%).
The top two B Group gainers on the BSE were— Natco Pharma (up 20%) and Rich Universe (up 20%).
The top two B Group losers on the BSE were— Plethico Pharma (down 19.98%) and Hanung Toys (down 19.94%).
Of the 50 stocks on the Nifty, 12 ended in the in the green. The major gainers were Jindal Steel (up 4.76%); Tata Motors (up 2.09%); UltraTech Cement (up 1.35%); Grasim (up 1.16%) and Asian Paints (up 1.03%). IDFC (down 4.79%); Jaiprakash Associates (down 4.44%); Hindalco Inds (down 4.24%); Ambuja Cements (down 4.07%) and Sesa Goa (down 3.96%), were among the top losers.
Markets across Asia settled lower on the strengthening yen and a poor showing of Chinese industrial units in June.
The Shanghai Composite declined 1.72%; the Hang Seng declined 0.54%; the Jakarta Composite dropped 1.68%; the KLSE Composite fell 0.49%; the Nikkei 225 tumbled 3.32%; the Seoul Composite lost 0.57% and the Taiwan Weighted settled 0.80% lower. Bucking the trend, the Straits Times rose 0.03%.
At the time of writing, two of the three European markets were trading in the green and the US stock futures were in the negative.
Back home, foreign institutional investors (FIIs) were net buyers of shares amounting to Rs278.04 crore on Friday while domestic institutional investors were net sellers of equities totalling Rs489.17 crore.
Havells India said it plans to enter into rural India market with its newly-launched 'Rio' brand of switches. The company aims to garner Rs150 crore revenues in the current fiscal from the conventional switches sales. According to the company, total market for conventional switches is estimated to be around Rs1,500 crore in India. The stock rose 0.13% to close at Rs755 on the NSE.
Larsen & Toubro (L&T), as part of a consortium, won its biggest ever civil construction order, with the engineering company’s stake valued at around Rs8,250 crore ($1.4 billion), to build a metro project at Riyadh in Saudi Arabia. The contract was won in consortium with four other global companies, and the total value of the order is around Rs35,000 crore. L&T's part of the contract involves design, construction and commissioning of the third line of the metro project which involves 41 kilometres of driver-less train operation. The line is expected to service around 5,000 passengers per hour per direction. L&T would be building bridges, tunnels, elevated and underground stations, depots, roads, along with CCTV infrastructure amongst others. L&T shares, however fell 0.80% to close at Rs838.95 on the NSE.
The Janata Party president has urged Prime Minister Singh to put on hold both the India-UAE 'bilateral' and the Jet-Etihad proposed deal until a thorough independent investigation
Janata Party president Dr Subramanian Swamy has raised several questions on the ownership and effective control of Jet Airways post its deal with Abu Dhabi-based Etihad Airlines and on the security concerns related with the deal. In a letter sent to Prime Minister Manmohan Singh, the Janata Party president had requested to adequately scrutinize the proposal between Jet and Etihad before granting the approval.
He said, "All scrutiny and investigation in the past have for one vested reason or another, been suppressed and never acted upon putting Indian security gravely at risk. The allegations of serious underworld connections from the united Arab Emirates (UAE) continue to haunt Jet's ownership and need to be pre-examined by the Intelligence Bureau (IB), Department of Revenue Intelligence (DRI) and other Intelligence services."
According to Dr Swamy, the process of examining the ownership and effective control, Government needs to first verify the Indian ownership and control, which is supposedly in the hands of a non-resident Indian (NRI), Naresh Goyal.
"It is essential to examine the ownership of Tail Winds Ltd, registered in Isle of Man, a tax haven, as to who the true shareholders and beneficial owners are, prior to and as a consequence of the proposed transaction. This would be important to establish and ensure that it is a genuine and NRI owned company and has no other shareholders. In addition, it should also be proved that it has not been financed from inappropriate and unacceptable sources," Dr Swamy said.
Dr Swamy said, the matter relating to security has been of serious concern to many of us and requires more serious investigation. "In December 2001, Anjan Ghosh, the then joint director of IB, wrote to the Ministry of Home Affairs confirming information about Naresh Goyal's underworld links with Chhota Shakeel and Dawood Ebrahim and also that the funding of Jet Air was with 'tainted Indian money laundered and recycled'. This document had been already submitted in the Bombay High Court. It has since not be overruled or contradicted."
"Under these circumstances, it is essential that a complete investigation be done on the ownership and antecedents of Jet and Jet Air from the year 1993 onwards, till the date of the transaction, including the effective control post the transaction. This investigation should be done by a special investigation team (SIT) of the Central Bureau of Investigation (CBI), the DRI and IB and other appropriate agencies. The information should also be sought under the Tax Information Exchange Agreement with the Isle of Man on the company," Dr Swamy said.
According to the Janata Party president, unless the real owners of Jet Air are established-from inception and more specifically, over the years, it would be a national security threat and risk for India to proceed with a transaction. Sn airline operating in India but being managed from outside, that too with unknown ownership and interest, will prove to the dangerous.
He said, "A great deal of material is available to support that prima facie, monies have been circulated through the company over the years by various methods including by the appointment of GSA's both in India and abroad, in companies such as Jet Air Pvt Ltd, owned by Naresh Goyal."
"In contrast, it has never been established as to who the real owners of Tail Winds are and how they are funded. It is alleged that the funds received now from Etihad have been syphoned out from Jet Airways for the purpose of reorganizing and restructuring the shareholding of Tail Winds to enable Naresh Goyal to show himself as the 51% owner as an NRI. In order to do this he needs to repay the original financers or circulate the funds in such a way that the shares get transferred from Tail Winds to his personal name," he added.
The Janata Party president also raised questions over the valuation of Jet Airways by Etihad. He said, "…the government should go into the details as to why the value of Jet, which is valued by the stock market at around $ 614 million (as on 9th July 2013), is being considered differently by Etihad at about $1,582 million. Is it considering the direct and indirect benefits inuring to Jet through sale of UK slots, sale of privilege memberships, and direct investment in Jet of $375 million?"
"In addition Jet Air has been given a soft loan of $ 300 million. This clearly shows that the entire valuation of Jet is not based on the intrinsic worth of the company but on the value of India's bilateral Rights which are now being given to Abu Dhabi, to benefit their national airline and Naresh Goyal," Dr Swamy alleged.
Talking about sensitivity of the deal in terms of national security, Dr Swamy said there are key concerns relating to operations of foreign controlled airlines on our defence airports and the operations of these airlines in times of national emergency.
He said, "You (the PM) will appreciate it not without reason, that the mature aviation jurisdictions like US and Europe give lot of emphasis in their laws and regulations on ownership and control of airlines registered in their jurisdiction. In this background, I am also dismayed to learn from reliable sources that rather than addressing the national security issues, Government is considering enhancement of FDI, including that of foreign airline, to 74% and simultaneously amending the civil aviation law to remove the ownership and control requirements."
"In fact, as I have been informed, the committee constituted for the purpose of FDI liberalization does not find aviation to be a sensitive issue in the context of our national security. I earnestly appeal to you to please consult the Ministry of Defence and other security and intelligence agencies and also aviation stake holders like the airlines and airports before considering such far reaching policy change," Dr Swamy said.
He said, even the most developed economies like the US and European Union (EU) have clear restrictions on ownership and effective control in order to safeguard their national security and interest. In the case of the US, it is 25% with voting rights and 24% with non-voting. In the case of the EU, it is 49%. Even the bilateral agreements between countries provide that the bilateral rights can only be utilised by airlines where the effective ownership and control rests with nationals in their respective countries, the Janata Party president added.
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The formulation company has impressed with 66% and 26% rise in net profit and sales, respectively while it has filed another ANDA during the quarter, taking the tally to 15
Ajanta Pharma Ltd, a specialty focused pharmaceutical formulation company, announced 66% rise in its first quarter net profit to Rs33 crore from Rs20 crore a year ago, driven by robust exports and consistent sales across geographies. The company’s revenue from operations stood at Rs219 crore for the three month period ending 30 June 2013, 26% higher compared with same period last year.
According to Moneylife database, the company’s market capitalisation is valued at 13.09 times operating profit while its return on networth stood at 32%.
Commenting on the results, Yogesh Agrawal, managing director, said, “Our sustained performance quarter after quarter reflects the result of our undivided commitment towards brand building leading to sustained business. We have been able to build a strong brand equity across geographies—India and overseas in branded generic space.”
During the quarter, Ajanta Pharmaceuticals filed one more abbreviated new drug application (ANDA) with United States Food and Drug Administration (USFDA), taking the total to 15 ANDAs (2 approved and 13 waiting for approval).
On the occasion of completing 40 years of ‘Serving Global Health Care Needs’, the company’s board has recommended issue of bonus shares in the ratio of one share for every two shares held.
We had recommended the stock last year, on 4 May 2012, to our Stockletters subscribers, at Rs272.
Ajanta Pharma closed Monday at Rs993 on the BSE, down 2.91%, while the 30-share Sensex ended marginally down at 19,593..