The trend is up, unless Nifty closes below 6,000 on Monday
Following a 300-point rally in Dow Jones yesterday, both Sensex and Nifty opened strong on Friday and remained so throughout the day with steady volumes. Initially, after a strong opening, the markets dipped, but it picked up immediately and maintained strength. The Sensex and Nifty opened higher at 19,918 and 6104, respectively. After hitting a low of 20,368 and 6,046, both the indices moved gradually up to hit a high of 20,559 and 6,107. Sensex closed at 20,528 (up 255 points or 1.26%) while the Nifty closed at 6,096 (up 75 points or 1.25%).
Among the other indices on the NSE, the top five gainers were Bank Nifty (3.24%); IT (3.10%); Realty (2.83%); Service (2.26%) and Finance (2.22%). The top five losers were Metal (1.43%); Pharma (1.16%); FMCG (0.90%); Commodities (0.89%) and PSE (0.59%).
Of the 50 stocks on the Nifty, 27 ended in the green. The top five gainers were ICICI Bank (5.37%); Bank of Baroda (4.94%); Infosys (4.82%); LT (4.64%) and HCL Technologies (3.52%). While the top five losers were Coal India (down 4.03%); Hindalco (down 2.82%); NTPC (down 2.77%); Tata Power (down 2.63%) and Sun Pharma (down 2.30%).
The biggest news yoday was the earnings release of IT-bellwether Infosys. Its September quarter results were mixed. Its rupee-denominated revenues grew 31.5% but it was undone by net profits which grew just 1.6% in rupee terms. Its net profit in dollar terms declined 11.1%. Yet, the company issued positive forward guidance and expects its rupee-denominated revenues to grow 22% by March 2014.
Another factor that buoyed the markets was when market watchdog Securities Exchange Board of India (SEBI) issued guidelines to revive real estate investment trust (REITs) after it put it on the backburner in 2008. The guidelines will enable property companies to hive off assets as a separate listed entity. This way, they will be able to raise much needed capital. However, the draft rules propose that only companies with assets worth at least 10 billion rupees would be eligible to list particular assets of special purpose vehicles (SPVs). This caused property stocks to rally. The CNX Reality Index went up 2.83 %.
On the international scene, the continued US government shutdown took centre stage as President Barack Obama and the Republicans, led by House Speaker John Boehner, failed to come to an agreement in a meeting that lasted 90 minutes. Nevertheless, Obama expressed optimism at reaching a short-term deal which would raise debt-level ceiling which will avert a US default. The President insisted on lifting the shutdown as his priority and parties seemed to agree that a default would not be an option. Despite no deal, the markets remained buoyed on hopes that the option of default is off the table.
Asian markets were in the green with Shanghai Composite the leader, finishing the day up 1.70%. US futures were trading marginally higher and European indices too were trading positively.
Even though structural problems in Indian economy remains, Morgan Stanley feels that India is stabilising on account of lower current account deficit and inflows via NRI deposits. But it remains cautious on the country’s recovery
Morgan Stanley Asia Pacific (Morgan Stanley), in their latest note titled ‘Near-Term Relief, but Not Out of the Woods’, is cautious about the recovery of the Indian economy. They expect the balance of payments (BoP) deficits to be contained at $1.3 billion, with lower current account deficit (CAD). The note said, “We estimate a FY2014 BoP deficit of $1.3 billion in our base case, driven by a lower current account deficit of $59 billion, additional $15 billion inflows via deposits from non-resident Indians (NRIs) and relatively contained foreign institutional investment (FII) outflows.”
Morgan Stanley believes interest rates ought to be high for the economy to stabilise without going overboard. The report said, “While the balance of payment is important for the near term, the key to a sustainable external funding position for corporate and sovereign India is higher domestic real rates.”However, they feel that structural issues still remain most notably interest rates and asset quality of banks. The note said, “The key to stabilising macro remains higher domestic real rates, but unfortunately, that also de- stabilises Indian micro and for credit that means weaker financial sector asset quality and corporate funding risk.” Recently, Raghuram Rajan increased repo rates to reign in inflation. Morgan Stanley expects downward bias on inflation.
One of the key concerns of Morgan Stanley is the quality of assets held by the banking sector which is rapidly deteriorating. “The likelihood of a sustainable move depends on the stabilisation in bank asset quality and in corporate balance sheet quality,” said the note. Below is the chart that highlights the perils of the Indian banking system and Morgan Stanley expects it to get worse. This could stymie economic recovery.
However, India still remains exposed to external contingencies, especially on currency movements and economic recovery of the United States, and whether tapering will continue. Thus, one way to insulate this is to address domestic issues, though it remains to be seen if the Indian government will ever get around to doing this. The note says, “We expect India to remain exposed specifically to the trend in US real rates/US dollar and more generally to the external funding environment. Hence, we believe that the key will be to lift real GDP with policy reforms and change the expectation of the returns on investment for entrepreneurs by systematically addressing the issues related to the business environment.”
Regarding the Indian rupee, Morgan Stanley is bullish on the US dollar and Indian rupee and expects the domestic currency to touch 58 to the dollar from current levels.
Taking cognizance of the issue, the CIC asked the director of SUR Section at MCD to ensure that indexing and cataloguing of all the records is done in specific time limit. This is the 183rd in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application
The Central Information Commission (CIC), while allowing an appeal, asked the director of Slum Upgradation and Rehabilitation (SUR) at Municipal Corporation of Delhi (MCD), to index and catalogue all the records of the department kept haphazardly in about 60 cupboards. The deputy director of SUR branch admitted during the hearing that the records are kept very haphazardly and they do not have the resources to locate records and provide the information within the 30 days limit under the Right to Information (RTI) Act.
While giving the judgement on 16 July 2009, Shailesh Gandhi, the then Central Information Commissioner said, "...the SUR Section lacks the capacity to be able to meet the requirement of the RTI Act. It does not have an index and catalogue of the records it has. Thus compliance of the Section 4 of the RTI Act which is required by 12 October 2005 has still has not been done to fulfil even the basic need of running a public office which can do any reasonable work."
Delhi resident Farooque, on 27 September 2008, sought from the Public Information Officer (PIO) of Slum and Jhuggi Jhopri Department at MCD information regarding number of people, who were living in slum near Shahdara Railway Station, to whom the plot had been allotted, their details and number of people who deposited money for allotment of plot.
In his reply the PIO asked Farooque, the applicant to collect required document from the DRAI Section by paying Rs112 as fee for copying the documents.
There was no reply received from the First Appellate Authority (FAA) due to which, Farooque, the appellant approached the CIC with his second appeal.
During the hearing, Mr Gandhi, the then CIC, observed that the appellant had been provided 43 pages of survey list which was not sought by him. The details of people who paid money had not been provided and no reasons had been given for this by the PIO, the Bench noted.
Farooque complained (to the CIC) that the FAA asked him to come on 19th February and then on 12 March 2009. However, on both occasions the FAA SK Jain, deputy commissioner was not present. "It appeared that he (the FAA) gave a further date of 23 March 2009 and postponed it to 27 May 2009. Finally the PIO brought an order from the FAA's dated 3 June 2009. A reading of the FAA's order showed that it did not take into account anything mentioned by the appellant in his first appeal. This reduced the whole process of first appeal to a farce," Mr Gandhi said.
The PIO stated that he sought assistance of NK Gupta, the accounts officer on 14 November 2008 to provide the information about the people who had deposited the amount for the plots. "However, after various notings no information was provided," the PIO said.
Purushottam Kumar, the AD (cash) who was present during the hearing admitted that the information was available with the record room of the Accounts Department. Mr Gandhi said, "Thus it appeared that the deemed PIO NK Gupta was responsible for denial of information without any reasonable ground."
The Bench also found the FAA SK Jain to be responsible for complete dereliction of duty. It then asked the FAA to send an explanation to the CIC before 30 June 2009 giving reasons why disciplinary action should not be recommended against him.
While allowing the appeal, the Bench then directed the PIO to refund Rs86 charged as additional fee for providing unnecessary data of 43 pages. The Bench also asked deemed PIO Gupta to provide the information to Farooque before 20 June 2009.
After finding the deemed PIO Gupta guilty of not furnishing the information within the time specified under sub-section (1) of Section 7 by not replying within 30 days, as per the requirement of the RTI Act, Mr Gandhi issued a show cause notice.
During the show cause hearing on 16 July 2009, Gupta, the deemed PIO stated that the records were actually with Slum Upgradation and Rehabilitation (SUR) branch and that SUR branch was responsible for providing the information. Ashok Bhatia, deputy director of SUR branch stated, "The SUR branch is in the process of segregation of the records contained in about 60 cupboards and it is a matter of chance that we may get the required information in out hands. The records are kept very haphazardly and we do not have the resources to locate records and provide the information within the 30 days limit of RTI."
The Bench took this in the cognizance and felt that the SUR Section lacks the capacity to be able to meet the requirement of the RTI Act. Mr Gandhi said, "It does not have an index and catalogue of the records it has. Thus compliance of the Section 4 of the RTI Act which is required by 12 October 2005 has still has not been done to fulfil even the basic need of running a public office which can do any reasonable work."
The Bench then directed YP Rawal, director of SUR Section to ensure that indexing and cataloguing of all the records is done before 15 September 2009 and to send a compliance report to the CIC before 20 September 2009 failing which the CIC will be forced to take action.
CENTRAL INFORMATION COMMISSION
Decision No. CIC/SG/A/2009/000985/3712adjunct
Appeal No. CIC/SG/A/2009/000985
Appellant : Farooque
Dilshad Garden, Delhi—110095
Respondent : YP Rawal
Public Information Officer
Municipal Corporation of Delhi
Slum & JJ Department
Room No. 8, Punarwas Bhawan,
ITO, New Delhi