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

Nifty has to break the range of 5,190 and 5,340 for a trend change. It may take a while

Positive global cues and across-the-board buying helped the benchmarks settle higher for the second day. Today the Nifty moved in a narrow range of 5,233 and 5,258. Yesterday we had that the gains might be temporary. We may now see the Nifty moving sideways in the range of 5,190 and 5,340. For further direction a break out from this range is a prerequisite. The National Stock Exchange (NSE) saw a volume of 52.33 crore shares.


The market opened higher on supportive cues from the global markets, which were in the positive. US indices rose between 0.70% and 1% overnight on better-than-expected earning reports from chipmaker Intel Inc and Honeywell. Reacting positively to the numbers, markets across Asia were also in the green in early trade today.


Back home, the Nifty opened 34 points up at 5,250 and the Sensex resumed trade at 17,288, up 103 points over its previous close. Buying interest in banks, technology and metal stocks supported early gains.


The indices were range-bound in subsequent trade but a positive of the key European markets saw an uptick in buying activity in the noon session. The benchmarks hit their intraday high shortly before 2.00pm with the Nifty going up to 5,258 and the Sensex rising to 17,319.


However, selling pressure in blue-chips resulted in the market giving up part of its gains and touching the day’s low in post-noon trade. At the lows, the Nifty fell to 5,233 and the Sensex going back to 17,245.


Recovering from the lows, the market closed the positive for the second day in a row. The Nifty added 26 points (0.51%) to 5,243 and the Sensex gained 99 points (0.57%) to settle at 17,284.


The advance-decline ratio on the NSE was positive at 891:777.


Today’s gains came mostly from index heavyweights as the broader markets, though they settled in the green, underperformed the Sensex. The BSE Mid-cap index rose 0.12% and the BSE Small-cap index advanced 0.37%.


Barring the BSE Auto (down 0.47%) and BSE Fast Moving Consumer Goods (down 0.02%), all other sectoral gauges settled higher. The sectoral toppers were BSE IT (up 1.75%); BSE Consumer Durables (up 1.38%); BSE Oil & Gas (up 1.24%); BSE Power and BSE Metal (up 0.88% each).


Infosys (up 3.08%); Sterlite Industries (up 2.42%); Tata Power (up 2.34%); BHEL (up 2.18%) and Bajaj Auto (up 1.76%) were the top gainers on the Sensex. The main losers were Maruti Suzuki (down 8.74%); Bharti Airtel (down 2.34%); Hero MotoCorp (down 1.37%); State Bank of India (down 1.29%) and Dr Reddy’s Laboratories (down 0.98%).


The top two A Group gainers on the BSE were—Dish TV India (up 4.63%) and GMR Infra (up 3.97%).

The top two A Group losers on the BSE were—Maruti Suzuki (down 8.74%) and Idea Cellular (down 3.94%).


The top two B Group gainers on the BSE were—Advik Laboratories (up 20%) and Beckons Industries (up 19.23%).

The top two B Group losers on the BSE were—Filmcity Media (down 13.64%) and Hazoor Multi Projects (down 12.50%).


The key advancing stocks on the Nifty were Cairn India (up 3.02); BPCL (up 2.99%); Infosys (up 2.80%); IDFC (up 2.56%) and BHEL (up 2.47%). The draggers of the index were Maruti Suzuki (down 9.19%); Bank of Baroda (down 3.05%); Kotak Mahindra Bank (down 2.96%); Bharti Airtel (down 2.56%) and SBI (down 1.28%).


Markets in Asia settled higher on better-than expected earnings from US majors like Intel and Honeywell and strong housing data from the world’s biggest economy.


The Shanghai Composite gained 0.73%; the Hang Seng jumped 1.66%; the Jakarta Composite rose 0.36%; the Nikkei 225 climbed 0.79%; the Straits Times gained 0.39%; the Seoul Composite surged 1.56% and the Taiwan Weighted advanced 1.41%. Bucking the trend, the KLSE Composite lost 0.02%.


At the time of writing, the key European gauges were up between 0.36% and 1.07% and the US stock futures were in the positive.


Back home, foreign institutional investors were net sellers of shares amounting to Rs276.40 crore on Wednesday, whereas domestic institutional investors were net buyers of stocks amounting to Rs165.75 crore.


Diamond Power Infrastructure said it has acquired stake in Maktel Control & Systems, a manufacturer of power and control panels of up to 400 Kv. While Damond Power did not disclose the transaction details, it said Maktel reported revenues of Rs40 crore in the last fiscal. Diamond Power rose 0.66% to close at Rs99 on the NSE.


Shriram Transport Finance Company said it plans to raise about Rs300 crore by issuing non-convertible debentures (NCDs). The offer will open on 26th July and close on 10th August. The face value of each NCD will be Rs 1,000. The stock gained 0.67% to close at Rs545.25 on the NSE.


Indraprastha Gas (IGL),which supplies piped natural gas (PNG) in Delhi, has been directed by a consumer forum here to pay Rs10,000 as compensation to a customer for delay in providing gas connection to him. The stock gained 1.63% to settle at Rs240.70 on the NSE.


Government to set up Board for fast clearance to energy, infra projects

The PMO decided to set up the Project Clearance Board against the backdrop of several projects, including 70 in oil and natural gas sector, facing delays due to lack of necessary clearances

New Delhi: In a major move to boost investor confidence, the Indian government has decided to set up a high-powered board to ensure speedy 'one-time' clearances to projects in energy and infrastructure sectors and address the problems in getting regulatory permissions, reports PTI.
The decision to set up the Project Clearance Board on the lines of Foreign Investment Promotion Board (FIPB) was taken by the Prime Minister's Office (PMO) against the backdrop of several projects, including 70 in oil and natural gas sector, facing delays because of lack of necessary clearances.
The Board, to be headed by the Cabinet Secretary, will include representatives from the Ministries of Home, Defence, Environment & Forests, Commerce, Coal, Department of Space and other infrastructure and energy related Ministries or Departments, a PMO statement said.
"In a meeting held in PMO to review the status of clearances of Oil & Gas Blocks awarded under the NELP, it was decided that a Project Clearance Board along the lines of FIPB, would be constituted under the chairmanship of the Cabinet Secretary for review and issue of one-time clearances, including security clearance," it said.
The Board will meet on a monthly basis to review the status of clearances for energy and infrastructure projects and expedite issuing of security and other clearances.
It noted that "one of the biggest hurdles" to speedy implementation of projects is the delays faced by project implementing agencies and private firms with concessions, in obtaining security related clearances from many agencies.
It cited the example of progress in exploration work in over 70 oil blocks awarded under the NELP which has slowed down due to lack of clearances. There are similar problems in other areas such as Ports and infrastructure sectors, it said.
The PMO said the decision to set up the Board was taken as there is "a need to have an institutionalised mechanism for issuing clearances in a time-bound manner".
"There is already a model for clearing foreign investments in the form of the FIPB where foreign investment clearances are given through regular meetings of the FIPB under the Department of Economic Affairs," the PMO statement said.
"A need for a similar mechanism was felt for other clearances so that the issue of delayed clearances is resolved," it said.
Ministries would report to this Board the status of issuing of clearances after following their internal due diligence processes.
For the Petroleum & Natural Gas sector, the special cell for clearances being set up in DGH will act as the secretariat, the statement said.
A common mechanism for all sectors will be evolved soon and the Board will be set up in the coming weeks.
The decision to set up the board comes at a time when the government is facing allegations of policy paralysis and there are apprehensions among foreign investors.
US President Barack Obama had told PTI last week that investment climate in India had deteriorated.
The PMO announcement comes on a day Tata group Chairman Ratan Tata said that Prime Minister Manmohan Singh must restore government credibility and place the country on a growth path once again by "removing roadblocks".


Insurance companies under lens for tax evasion of over Rs300 crore

An initial probe has found that insurance companies are evading taxes at the time of renewing old policies or refunding amounts on policies surrendered before the maturity period

New Delhi: Insurance companies have come under the scanner of a government intelligence agency for allegedly evading service tax of over Rs300 crore, reports PTI.
The Directorate General of Central Excise Intelligence (DGCEI) has initiated a probe following complaints of the service tax evasion by various insurance providers.
“There have been some instances of tax evasion by insurance companies. An enquiry is being conducted by the officials,” a senior DGCEI official, who did not wish to be identified, told PTI.
He said the records of insurers are being cross-verified to ascertain any irregularities.
“The inquiry so far has found service tax evasion of at least Rs300 crore. The investigations are underway and the amount is likely to be higher,” the official said without divulging names of insurance companies under the lens.
All general policies including insurance against risk of loss to assets like motor vehicle are charged service tax at 12.36% on the annual premium paid, while the rate of service tax for life insurance varies on the part of premium taken towards risk coverage, according to a Mumbai-based service tax expert.
According to another DGCEI official, most of the irregularities have been detected in payment to insurance brokers or agents by the companies.
“During our enquiry, we found that some companies were deducting service tax from agents who were selling their products. But failed to show it on their accounts book for government scrutiny,” the official said.
Besides, there have been instances where the companies were giving incorrect data of the total policies sold or renewed by them to evade tax, he said.
The total annual premium income of the insurance industry comprising life, non-life and health, is around Rs3.5 lakh crore, as per the Insurance Regulatory and Development Authority (IRDA) data. 
According to DGCEI, initial probe has found that companies were evading taxes at the time of renewing the old policies or refunding amounts on policies surrendered before the maturity period.
“There are also instances where the firms are evading service tax net in cases where the insurer is charged an amount for shifting from one insurance company to another,” the official said.
According to analysts, there are two types of frauds in the insurance sector. One is committed against the insurance companies by the brokers and the external constituents.
The second is the fraud committed by the insurance companies on the shareholders, regulators and tax authorities.
Tax evasion falls under the second category. Under this, commission is clubbed as other expenses to circumvent service tax payments.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)