Stocks
Sensex, Nifty in no man’s land: Monday Closing Report

For the first time in 7 days, the market did not make a lower low. A big move is now needed to decide further direction

 
The market settled lower amid volatile trade as a slew of economic indicators and possibility of a washout of the Monsoon Session of Parliament weakened investor sentiments. On Friday we had mentioned that a higher high and higher low on the Nifty will be the first sign of reversal. Since 24th August, when the fall began, the index has made a lower high and a lower low. However, today the benchmark managed to make a higher low and ended marginally in the negative. The Nifty needs to see a real big move for a proper direction to emerge. The National Stock Exchange (NSE) saw a volume of 46.82 crore shares and an advance decline ratio of 756:617. 
 
The market witnessed a gap up opening on positive global cues and domestic triggers. On the global front, assertion by the US Federal Reserve on Friday that it would take necessary steps to boost the country’s economy lifted Asian markets in morning trade today. On the domestic front, the expert committee on General Anti Avoidance Rules (GAAR) on Saturday recommended postponement of the controversial tax provision by three years and abolition of capital gains tax on transfer of securities.
 
The Nifty opened 18 points higher at 5,277 and the Sensex resumed trade at 17,466, 36 points over its previous close. Capital goods, metal and power led the all-round buying in early trade, helping the benchmarks scale their intraday highs. At the highs, the Nifty rose to 5,296 and the Sensex climbed to 17,510.
 
The market was sideways till mid-morning trade as continuing disruption of Parliament proceedings, for the ninth day today, worried investors about the fate of reforms chalked out by the government to woo fresh investments. 
 
Manufacturing output for the month of August, as measured by the HSBC factory Purchase Managers’ Index, which came in at a nine-month low of 52.8 from 52.9 in the previous month, resulted in the benchmarks paring their gains and slipping into the negative in late morning trade. 
 
The market touched its low around 12.10pm with the Nifty falling to 5,243 and the Sensex moving back to 17,350. The positive opening of the key European indices enabled the domestic benchmarks recover from their lows and enter into the positive. However, the gains were short-lived as selling pressure pushed them into the red once more.
 
A fair degree of choppiness saw the indices hover on both sides of their previous close in post-noon trade. The market settled marginally in the negative on selling pressure in realty, oil & gas and metal sectors in late trade. The Nifty closed five points lower at 5,254 and the Sensex settled 45 points down at 17,384.
 
While the Sensex settled marginally lower, the broader indices ended in the positive. The BSE Mid-cap index added 0.09% and the BSE Small-cap index rose 0.03%.
 
The sectoral gainers were BSE Capital Goods (up 0.53%); BSE Consumer Durables (up 0.61%); BSE Auto (up 0.40%) and BSE Power (up 0.12%). The main losers were BSE Realty (down 0.86%); BSE Oil & Gas (down 0.80%); BSE Bankex (down 0.65%); BSE Metal (down 0.59%) and BSE Healthcare (down 0.34%).
 
Of the 30 shares in the Sensex list, 12 settled in the green. The top gainers were Bajaj Auto (up 3.04%); Coal India (up 2.18%); Cipla, Maruti Suzuki (up 1.79% each) and BHEL (up 0.98%). Jindal Steel (down 2.23%); Tata Power (down 1.91%); Tata Motors (down 1.24%); Tata Steel (down 1.23%) and ONGC (down 1.20%) settled at the bottom of the index.
 
The top two A Group gainers on the BSE were—Aurobindo Pharma (up 6.78%) and Exide Industries (up 5.34%).
The top two A Group losers on the BSE were—Piramal Healthcare (down 6.39%) and IFCI (down 4.79%).
 
The top two B Group gainers on the BSE were—Advance Metering Technology (up 16.32%) and Mahavir Impex (up 16.18%).
The top two B Group losers on the BSE were—Arunjyoti Enterprises (down 12.93%) and Sambandham Spinning Mills (down 12.58%).
 
Out of the 50 stocks listed on the Nifty, 16 settled in the positive. The index was led by Ranbaxy Laboratories (up 3.12%); Coal India (up 2.66%); Bajaj Auto (up 2.65%); Maruti Suzuki (up 2.32%) and Hero MotoCorp (up 2.21%). The major losers were SAIL (down 2.24%); Tata Power (down 2.21%); Jindal Steel (down 2.03%); IDFC (down 2.01%) and Ambuja Cement (down 2%).
 
The Asian pack settled mostly higher as economic data from across the region kindled fresh hopes of the central banks might takes steps to spur growth. Two separate readings of China’s manufacturing activity for August has pointed to a slowdown, a sign that the decline is likely to continue into the third quarter.
 
The Shanghai Composite gained 0.57%; the Hang Seng rose 0.39%; the Jakarta Composite surged 1.42%; the KLSE Composite climbed 0.47%; the Seoul Composite advanced 0.40% and the Taiwan Weighted settled 0.72% higher. On the other hand, the Nikkei 225 declined 0.63% and the Straits Times fell 0.27%.
 
At the time of writing, the key European markets were in the green and US stock futures were mixed. However, the US markets will remain closed on Monday for the Labor Day holiday. 
 
Back home, institutional investors—both foreign and domestic—were net sellers of shares on Friday. While foreign institutional investors withdrew Rs211.08 crore from stocks, domestic institutional investors pulled out Rs172.54 crore.
 
Pharma major Wockhardt today said it has received final approval from the US health regulator for marketing generic bupropion hydrochloride tablets used for treating depression and is launching the product immediately. Bupropion tablets are generic version of Glaxo Smithkline's Wellbutrin SR tablets. Wockhardt declined 1.03% to close at Rs1,217 on the NSE.
 
The Serious Fraud Investigation Office (SFIO) has received complaints about alleged violation of corporate governance and other norms by textile major S Kumars Nationwide and the matter is being examined by the Registrar of Companies, ministry of corporate affairs said today. The stock fell 1.28% to settle at Rs19.25 on the NSE.
 
Wind turbine maker Suzlon today said its overseas subsidiary REpower Systems has bagged a 131.2 MW contract from Meridian Energy of Australia to supply 64 turbines for its wind farm project. The project will have a total capital cost of around 260 million Australian dollars and is scheduled to be installed and commissioned between September 2013 and January 2015. Suzlon closed at Rs15.40 on the NSE, up 2.67% over its previous close.
 

 

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No rash action in Vodafone case: Chidambaram

Chidambaram said the Vodafone tax matter will be decided after considering all aspects including recommendations the Shome Committee on indirect transfer of assets

 
New Delhi: Indian Finance Minister P Chidambaram on Monday said there will be no 'rash' action in Vodafone tax case and the matter will be decided after considering all aspects including recommendations the Shome Committee on indirect transfer of assets, reports PTI.
 
"They (I-T assessing officers) and are not going to act rashly. These are not small amounts on which you can take a rash decision," he told reporters.
 
He was asked whether the tax officials would send notice to Vodafone for collection of tax following amendment in the Income Tax Act with retrospective provisions during the Budget session of Parliament.
 
The Income Tax Department on 22 October 2010 passed an order determining a tax liability (including interest) of Rs11,218 crore on Vodafone on acquisition of Hutchinson's stake in Hutch-Essar through a deal in Cayman Islands in 2007.
 
The Supreme Court, however, quashed the order in January this year. After the apex court's ruling, the Income Tax Act was amended with retrospective effect to bring into tax net such deals.
 
"There is section 119. There is a Supreme Court judgement. There is opinion of the Attorney General. All this have to be studied by the assessing officer and his supervising officers... They will study all that. In the meanwhile, we will get the Shome committee's report also," Chidambaram added.
 
Section 119 of the Finance Act, 2012 seeks to validate the October 2010 order of the Income Tax Department. The Department had also passed an order imposing a penalty of Rs7,900 crore in April 2011.
 
However, the penalty demand was not enforced in view of a Supreme Court's direction dated 15 April 2011.
 
The government had earlier formed an Inter-Ministerial Group (IMG) to look into the arbitration notice sent by the telecom major under the India-Netherlands bilateral investment protection agreement (BIPA).
 
On taxing non-resident transfers where the underlying asset is in India, the Finance Minister said the scope of the terms of reference of the Shome Committee has been expanded to include all non-resident tax payers instead of only foreign institutional investors (FIIs).
 
"Dr Shome has promised to look into it. So let us see what he has to say after comparing provisions with similar provisions in other jurisdictions," he said.
 
The Shome committee was set up by Prime Minister Manmohan Singh in July to address concerns of foreign and domestic investors on General Anti-Avoidance Rules (GAAR).
 

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No end to Parliament impasse over CAG report on coal

The month-long session, which already lost the previous two weeks to BJP's unrelenting demand for resignation of PM, again saw uproar created by BJP members, leading to wastage of one more day of both Lok Sabha and Rajya Sabha

 
New Delhi: With no end to the government and Bharatiya Janata Party (BJP) stand-off over the report by Comptroller and Auditor General (CAG) on coal block allocation, the last week of the Monsoon session of Parliament began on Monday with a repeat of stormy scenes raising the possibility of a washout of the remaining four days, reports PTI.
 
The month-long session, which already lost the previous two weeks to BJP's unrelenting demand for resignation of Prime Minister Manmohan Singh, again saw uproar created by BJP members, leading to wastage of one more day of both Lok Sabha and Rajya Sabha.
 
However, amid the din, three bills, including Protection of Women Against Sexual Harassment at Workplace Bill, 2010, were passed in the Lok Sabha within minutes without any debate.  
 
The other two legislations were the North-Eastern Areas (Reorganisation) Amendment Bill, 2011, and the National Highways Authority of India (Amendment) Bill, 2011.
 
In the Rajya Sabha, repeated attempts by the government to ensure passage of the All India Institute of Medical Sciences (Amendment) Bill, 2012, were thwarted by Left parties which insisted that these should not be cleared without a debate.
 
As the two Houses met for the day, it was the repeat of scenes witnessed over the last eight days with BJP members raising slogans and rushing into the Well to demand the Prime Minister's resignation.
 
Slogans like "Koyle ki dalali hai, Congress sarkar kali hai (brokerage of coal has turned Congress government black)" and "Pradhan Mantri Isteefa Do (Prime Minister should quit)" rent the air leading to clashes as Congress members countered.
 
Some UPA members were also seen waving the 'List of Business' at the agitating BJP members indicating their opposition to the disruption of the proceedings. 
 
AIADMK members in the Rajya Sabha too shouted slogans seeking resignation of the Prime Minister and targetting the government. Their party colleagues in the Lok Sabha were seen in the aisle raising some slogans.
 
P Lingam (CPI) was seen with a placard opposing the forthcoming visit of Sri Lankan President Mahinda Rajapaksa to India. In the Rajya Sabha, DMK and the Left displayed placards saying 'Stop Training the Sri Lankan Army'.
 
Trouble began in the Lok Sabha soon after Speaker Meira Kumar read out the obituary reference to former member Kanshiram Rana.
 
Amidst the din, both Houses were adjourned till noon.
 
When the Rajya Sabha reassembled, similar scenes were witnessed with BJP members again rushing to the well leading to adjournment of the House till 2pm.
 
In the Lok Sabha, proceedings could be managed for almost 30 minutes amidst the din with the Speaker pushing the passage of the three legislations. She later adjourned the House for the day after the bills were adopted by voice vote.
 
But in the Rajya Sabha, plans of the government to seek passage of the All India Institute of Medical Sciences (Amendment) Bill 2012 could not succeed because of Left parties' resistance to clearing the important legislation without any discussion.
 
This was despite the fact that Deputy Chairman PJ Kurien asked BJP members to go to their seats pleading that the bill be passed as it was very important.
 
However, as members remained unrelenting, he adjourned the House till 2pm. It was a similar story when the House re-assembled prompting Kurien to adjourn the House for the day.
 
Earlier, Kurien's attempts to take up a short notice question on whether companies may lose Rs6,000 crore every year due to cut in spot sales of coal also could not be taken up.
 
As YS Chowdhury (TDP), in whose name the question was listed, did not raise it, Coal Minister Sriprakash Jaiswal laid his reply in the din and no supplementary question was asked.
 
Earlier, Chairman Hamid Ansari's repeated pleas to restore order went in vain as BJP members remained unrelenting in their slogan-shouting.
 
SP members were also up on their feet trying to raise certain issues but were inaudible. Ansari then adjourned the House till noon.
 

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