The Nifty is headed down and find its first support at 5,160 and then at 5,075. However, there will intermittent rallies. For a trend reversal, the Nifty must close above previous day’s high
The market, which was in the positive till the post-noon session, pared all its gains in late trade and ended flat. Today for the fifth successive trading day, the Nifty closed in the negative. We may see a short reversal for a day or two which may not be sustained. We continue to maintain that the weakness is trending in the market. The benchmark may find its first support at 5,160 and then at 5,075. The National Stock Exchange (NSE) saw a volume of 51.69 crore shares.
The market witnessed a strong opening as investors resorted to bargain hunting as stocks became cheaper after four days of decline. Support from its Asian peers, which were in the green in morning trade, also supported the upmove. The Nifty opened at 5,228, up 31 points, and the Sensex gained 74 points to start the day at 17,177. Healthcare, banking, power and metal stocks supported early gains.
The indices hit their intraday high in initial trade with the Nifty at 5,237 and the Sensex scaling 17,236. However, the highs enticed the investors to book profits, resulting in the benchmarks paring part of their gains.
The market continued its steady decline in subsequent trade. Selling pressure in auto, power and realty stocks in the post-noon session pushed the indices into the negative.
The market closed flat with a mixed bias following a sell-off in late trade. The Nifty settled four points down at 5,193 and the Sensex gained two points to 17,105.
The advance-decline ratio on the NSE was in favour of the decliners at 408:1012.
The broader indices outperformed the Sensex today as the BSE Mid-cap index gained 0.54% and the BSE Small-cap index climbed 0.73%.
The top sectoral indices were BSE Consumer Durables (up 1.07%); BSE Realty (up 0.83%); BSE Healthcare (up 0.32%); BSE Power (0.17%) and BSE Capital Goods (0.12%). BSE Auto (down 0.78%); BSE Oil & Gas (down 0.62%); BSE Metal (down 0.33%); BSE IT (down 0.27%) and BSE Bankex (down 0.16%) settled at the bottom of the index.
The top movers on the Sensex were Wipro (up 1.91%); Dr Reddy’s Laboratories (up 1.67%); ITC (up 1.37%); Bharti Airtel (up 1.24%) and Hindalco Industries (up 1.14%). The main laggards on the index were Jindal Steel (down 2.49%); Hero MotoCorp (down 1.41%); ICICI Bank (down 1.31%); ONGC (down 1.19%) and Tata Motors (down 0.97%).
The top two A Group gainers on the BSE were—Cadila Healthcare (up 4.74%) and Wipro (up 1.91%).
The top two A Group losers on the BSE were—Adani Enterprises (down 8.43%) and Jaypee Infratech (down 5.79%).
The top two B Group gainers on the BSE were—Nu-Tech Corporate Services (up 18.64%) and Aarya Global Shares (up 16.72%).
The top two B Group losers on the BSE were—Swelect Energy Systems (down 48.39%) and PM Telelinks (down 19.99%).
The Nifty was led by Wipro (up 2.04%); Dr Reddy’s Labs (up 1.78%); ITC (up 1.49%); Sun Pharma (up 1.20%) and Coal India (up 1.10%). The main losers on the Nifty were Reliance Infrastructure (down 3.49%); BPCL (down 3.10%); Bajaj Auto (down 2.72%); Axis Bank (down 2.38%) and BHEL (down 2%).
Markets in Asia settled in the green as investors awaited comments from US Federal Reserve chief Ben Bernanke about the economic situation in the world’s largest economy. Meanwhile, the Japanese finance ministry warned that it would intervene in the forex market, if necessary, as the yen hit a one-month high against the dollar.
The Shanghai Composite gained 0.62%; the Hang Seng jumped 1.75%; the Jakarta Composite surged 0.82%; the KLSE Composite rose 0.19%; the Nikkei 225 climbed 0.35%; the Straits Times advanced 0.54%; the KOPSI Composite was up 0.23% and the Taiwan Weighted settled 0.52% higher.
At the time of writing, the key European markets were mixed with two of the three main indices in the green and the US stock futures in the positive.
Back home, foreign institutional investors were net buyers of equities totalling Rs257.17 crore on Monday whereas domestic institutional investors were net sellers of shares aggregating Rs40.59 crore.
Aditya Birla Group company Grasim Industries is working on setting up a $500 million (Rs2,764 crore) plant in Turkey for producing VSF, a raw material used for making apparels and home textiles. The proposal is still in the planning stage with the company in the process of conducting a detailed study and obtaining various approvals. The stock declined 0.52% to close at Rs2,585 on the NSE.
SKS Microfinance today said it has raised Rs230 crore through its qualified institutional placement (QIP), which was oversubscribed on the last day of its issue, bringing in much-needed growth capital. The QIP, which was launched on 12th July received bids worth around Rs230 crore, SKS said in a statement. The stock tanked 2.38% to settle at Rs79.85 on the NSE.
Godrej Properties today said it has entered into a deal to develop a premium residential township project with a saleable area of 3.5 million sq ft on 110 acres in Panvel on the outskirts of Mumbai. The project would be on a joint venture basis with Godrej Properties entitled to a 35% share of the profit from the development. The stock fell 0.19% to Rs514.60 on the NSE.
According to the RBI governor, interest cost is only one of the several factors that have dampened growth, and the increase in policy rate by the Reserve Bank alone cannot explain the investment slow down
Mumbai: Amid widespread demand for cut in interest rate in the forthcoming monetary review to boost growth, the Reserve Bank of India (RBI) on Tuesday said the policy rate is not the only reason for slowdown in investments and the economy, reports PTI.
"The Reserve Bank maintains that interest cost is only one of the several factors that have dampened growth, and the increase in policy rate by the Reserve Bank alone cannot explain the investment slow down," RBI Governor D Subbarao said at the sixth annual Statistics Day Conference in Mumbai.
"I have asked our economic research department to do a detailed study on the time-series relationship between real interest rate and investment activity. We expect to put out that report in the public domain in the next couple of months," he added.
His comments come two weeks ahead of the quarterly monetary policy review which is due on 31st July.
Subbarao's decision to keep interest rate unchanged at the policy review last month to contain inflation evoked criticism from industry and the government.
Ahead of the policy, industry has stepped up demand for interest rate cut to boost economic growth, which fell to nine-year low of 6.5% for 2011-12.
The RBI Governor also raised issues concerning data gaps with regard to computation of inflation, national income and growth and underlined the need for rectifying them.
He also questioned the linkage between deceleration in industrial growth to 6.5% in 2011-12 and the increase in policy rates by 3.75% by RBI during March 2010 and October 2011. "... it is necessary to look behind the data and explore what lies underneath," he added.
On the current situation, the RBI Governor said, "The uncertainty surrounding economic activity has heightened in the post-crisis period. India is no exception."
He added that assessing India's potential growth rate, consistent with our objective of low and stable inflation, remains a challenge.
In its annual report for 2009-10, Subbarao said, the Reserve Bank had reported that the potential output of the Indian economy may have dropped from 8.5% pre-crisis to 8.0% post-crisis.
"Latest assessment following the standard filtering technique suggests that potential output growth may have further fallen to around 7.5%," he said.
Meanwhile, for getting a clearer picture of the price rise trend, Subbarao proposed a producers price index saying that the present structure of measuring inflation does not capture the price movement of services.
The Producer Price Index (PPI) will be better able to measure the average change over time in the sale prices of domestic goods and services, he said.
"In its present structure, the Wholesale Price Index (WPI) does not capture the price movement of services. Also, it is a hybrid of consumer and producer price quotes," he said.
Sellers' and purchasers' prices differ due to government subsidies, sales and excise taxes, and distribution costs, Subbarao said.
"For these reasons, it is, therefore, desirable that we move towards developing a Producer Price Index (PPI) that measures the average change over time in the sale prices of domestic goods and services," he added.
The Bombay High Court has asked MIDC not to permit manufacturing units within 750 metres of a river from 1st September, if they do not maintain existing facilities for discharging effluents
Mumbai: The Bombay High Court has asked Maharashtra Industrial Development Corporation (MIDC) not to permit manufacturing units within 750 metres of a river from 1st September, if existing facilities are not maintained for discharge of effluents, reports PTI.
Under the rules, facilities such as pipelines or common effluent treatment plant (CETP) are required to be maintained to achieve the stipulated discharge standards.
The directive was given by Chief Justice Mohit Shah and Justice Nitin Jamdar who also asked the Maharashtra Pollution Control Board (MPCB) to constitute within a month a committee for five MIDC estates in the state to monitor functioning of CETPs and for industrial units within MIDC areas.
The bench was hearing a PIL filed by Nicholas Almeida who sought action against polluting units in the state.
The industrial estates whose reports were tabled in the Court about effluents being discharged into CETPs are Lote Parshuram Environment Protection Cooperative Society (Ratnagiri), Greenfield CETP Plant (MIDC Chincholi, Solapur), Badlapur CETP Association (MIDC Badlapur), Chikhloli-Morivali Effluent Treatment (MIDC Ambarnath) and Tarapur Environment Protection Society CETP.
Perusing the reports, the judges observed, "it appears that the CETPs are not in a position to comply with the statutory norms."
The Court also directed the associations running CETPs to inform the state pollution control board about the highly polluting industries. Besides, MPCB has also been asked to inform the concerned associations running CETPs about such action being taken.
For instance, if directions for closure are issued by MPCB to the highly polluting industries, a copy of all such directions shall also be served on the associations running CETP, so that the concerned association can monitor compliance, the judges noted.
The Court further asked the associations to send particulars about such highly polluting industries to the MPCB within four weeks.
"On receiving such information, MPCB shall inform the concerned associations about the action being taken against the highly polluting industries, which shall also be done within four weeks thereafter," the judges noted.
The bench recently said that if the highly polluting industries are allowed to discharge effluents which do not meet with the norms, the ultimate action of closure of CETP will result into closure of all the industries in that area.
It therefore asked the MPCB to take serious note of any information about highly polluting industries received from the associations.
The judges asked MPCB to keep a check on the polluting industries on its own by carrying out surprise visits and taking samples of effluents being discharged by the units.
The Court said that in order to comply with its order, the associations running CETP will be at liberty to take samples of effluents of the industries which the associations consider to be highly polluting or having potential for high pollution. The associations shall also take into consideration the affidavit filed on behalf of MPCB, it noted.
The bench opined that the associations running the CETP will also be at liberty to make appropriate arrangements and to direct their respective members to make appropriate arrangements to see that the effluents being discharged by individual unit are segregated in such a manner that the association and MPCB will be in a position to find out the highly polluting industries.
The Court asked the associations running CETP to ensure that the effluents being received from the chemical industries meet with the inlet norms for the CETP, so that after the treatment, the CETP is able to release the treated effluents within the permissible norms.
The Judges further noted that in case the association running CETP finds that effluents being sent by an individual industrial unit into the CETP inlet are carrying such high pollution load that CETP will not be in a position to treat it for the purpose of meeting with CETP norms, the association shall discontinue receiving such effluents form the concerned unit after giving prior notice and thereupon the concerned industrial unit shall stop all manufacturing activities.
The Court warned that "hereafter any industrial unit having its own effluent treatment plant shall not carry on any manufacturing activity whenever its effluent treatment plant is not functioning for any reason whatsoever, whether for maintenance, repairs or for any reason whatsoever".
Similarly, whenever the CETP is not functioning for any reason whatsoever, the association shall call upon its members to stop manufacturing activities and the manufacturers shall thereupon stop their manufacturing activities, the judges remarked while adjourning the matter to 30th August.