A close below the day’s low continues to be the initial indicator for reversal
The Indian stock market on Monday witnessed a volatile session but managed to keep itself above last week’s low and closed in the positive after recording almost the same gain as made on Friday. Ahead of the budget day, the market seems to be very optimistic about the government’s growth-oriented budget.
The S&P BSE Sensex opened at 26,040 while CNX Nifty opened at 7,780. Sensex moved in the range of 25,993 and 26,124 and closed at 26,100 (up 138 points or 0.53%) while Nifty moved between 7,755 and 7,792 and closed at 7,787 (up 36 points or 0.46%). The NSE recorded a volume of 98.54 crore shares. India VIX rose 6.90% to closed at 19.4075.
Among the other indices on the NSE, IT (2.63%), Infra (1.02%), Pharma (0.99%) and Auto (0.68%) were gainers while the top five losers were Bank Nifty (1.21%), PSU Bank (0.87%), Finance (0.38%), Media (0.35%) and Smallcap (0.22%).
Of the 50 stocks on the Nifty, 30 ended in the green. The top five gainers were IDFC (6.01%), Sun Pharma (4.25%), Tata Power (3.45%), TCS (3.30%) and Infosys (2.98%) while the top five losers were IndusInd Bank (2.19%), HDFC Bank (1.98%), UltraTech Cement (1.88%), BPCL (1.73%) and ONGC (1.54%).
Of the 1,594 companies on the NSE, 787 companies closed in the green, 758 companies in the red while 49 companies closed flat.
Railway Minister Sadananda Gowda will present the final Railway Budget for 2014-15 in Lok Sabha on Tuesday. All the software stocks included in the Sensex 30 pack were among the top six gainers namely Infosys (3.23%), TCS (3.06%) and Wipro (1.86%).
Ministry of Petroleum and Natural gas clarified after market hours on Friday that it is not proposing any increase in prices of subsidised LPG and kerosene prices after certain media reports speculated about the possibility of increase in the prices of subsidised LPG and PDS Kerosene. Upstream oil and gas producers pay part of their profits to the government to finance subsidies to oil marketing companies, which sell Kerosene and LPG to the public at below market prices. Raising of LPG and kerosene prices would enable them to retain larger profits. ONGC (1.60%) was among the top two losers in the Sensex 30 stock.
Morgan Stanley upgraded IDFC to "overweight" from "underweight" and raised its target price. Basis of upgrading given was the potential benefits after RBI Governor Raghuram Rajan hinted at the possibility of exempting banks from liquidity ratio norms when raising debt for infrastructure. IDFC (6.23%) was the top gainer in the ‘A’ group on the BSE.
In response to a news that HDIL will sell its commercial complex in Mumbai suburb to cut debt, HDIL has clarified today that no transaction or agreements have been entered into which needs to be disclosed to Stock Exchanges pursuant to Clause 36 of the Listing Agreement. HDIL (3.78%) was the top loser in the ‘A’ group on the BSE.
US markets remained close on Friday on account of Independence Day holiday.
Asian indices showed a mixed performance. Jakarta Composite (1.70%) was the top gainer while Nikkei 225 (0.37%) was the top loser.
Business activity in emerging markets expanded last month at its fastest rate since March 2013, boosted by strong growth in China and India, a survey showed on Monday.
HSBC's composite emerging markets index of manufacturing and services purchasing managers' surveys jumped to 52.3 in June - well above the 50 threshold that indicates expansion - from 50.6 in May.
European indices were trading lower. US Futures were trading marginally in the red.
The wife and son of Subrata Roy Sahara have acquired citizenship of the Republic of Macedonia, a country in the central Balkan peninsula in South-East Europe, which is attracting foreign investment by offering citizenship, say reliable sources
Sushanto Roy and Swapna Roy, the son and wife of Sahara Group chief Subrata Roy, have acquired citizenship of the Republic of Macedonia, a country located in the central Balkan peninsula in South-East Europe. There is talk about another key director also acquiring Macedonian citizenship.
While Subrata Roy remains in jail for failing to obey orders of the Supreme Court (SC) of India, key members of the Roy family, who are part of the powerful private investment companies that control all the funds collected by the group are not even Indian nationals any longer.
Interestingly, we learn that Mr Subrata Roy himself has been a state guest in Macedonia several times. He is understood to have proposed to build a huge statue of Mother Theresa in Macedonia. There was also talk about setting up a swank Casino there.
Moneylife sent emails to Sahara Group’s PR agency on Friday for a response. Its key PR contact responded by telling us that this is a three year old issue and that many companies and businessmen have been acquiring Macedonian citizenship. However he did not want to be quoted or named.
According to an official from Sahara group, who does not want to be named, the Macedonian citizenship has been taken by Sushanto and his mother almost a year back. "The reason is that we are going for three big businesses in Macedonia. One is a dairy, which will export to many countries from there. For this fairy we have already got around 14,000 acres of land from Macedonian government. Second project is a seven star hospitality on the line of Las Vegas. It will be a 'Las Vegas' for European Countries, India and Middle East. The third project is a complete indoor setup for movie production. We are getting dozens of advantages (due to this citizenship) right from government permissions, allocations of lands and all level of tax benefits even up to 0% tax up to 10 years. It was a situation of compulsion for us to acquire citizenship in that country," the official said.
It is indeed a fact that Macedonian citizenship is among the least expensive, of the many countries that offer citizenships in exchange of investment. However, the fact that many top Indian industrialists and their key confidants are opting for foreign citizenship is important in the context of the government’s effort to trace black money overseas.
Macedonia, like Montenegro, Buglaria, Romania and several Balkan countries, are trying to attract investment by offering citizenships. According to media reports, Macedonia's government offers citizenship to anyone who invests at least 400,000 Euros and employs at least 10 people. “This offer stands for all investors except those in the hospitality and trade sectors,” a news report said quoting government spokesperson, Aleksandar Gjorgjiev.
In addition, foreigners who buy real estate worth over 40,000 Euros are given the right to stay in Macedonia for a year. Foreign nationals are currently allowed a maximum of three months stay before having to check out.
Macedonia was part of the former Yugoslavia, from which it declared independence in 1991. It became a member of the United Nations (UN) in 1993, but as a result of a dispute with Greece over its name, it was admitted under the provisional reference of the former Yugoslav Republic of Macedonia.
It is clear that both India and China are keen on attaching greater emphasis to bilateral trade and are putting the geopolitical issues on the back-burner
It may be a mere coincidence, but in the last few weeks, India received two special envoys, Russian Deputy Premier Dmitri Rogozin and Wang Li, Foreign Minister of China, representing President Putin and President Xi Jinping, respectively. Both had different agendas, but, at the same time, there was a common link with India as a likely partner in the emerging energy alliance!
Russia's giant gas pipe line - called the Altai gas pipe line and West-East gas pipe line - starting at Novi Urencoy and Purpeiskaya, will cover a total estimated distance of 2600 Kms and supply Russian gas to far flung cities like Shanghai and Nanchang in China. This project is valued at $ 400 billion, and, by the looks of it may eventually cover other prospective consumers like Mangolia, Nepal and India. Already, during his visit, Dmitri Rogozin has appraised the details and have sought India to join the energy alliance. This pipe line needs a southern diversion to serve India.
Last year, in October 2013, Chinese President Xi Jinping unveiled plans to set up the Asian Infrastructure Investment Bank, with a registered capital of $ 100 billion, and broadly outlined that this Bank would be able to provide a new financial channel to developing nations in Asia Pacific region. In fact, it is reported, as many as 22 countries have shown interest in this project.
Last month, China invited India to participate in the Bank. Such a move, in the long run, would facilitate access to infrastructure funding. At the moment, India has neither accepted or declined the invitation, and considering the pros and cons.
At the moment, the Asian Development Bank (ADB), with a capital of $165 billion, is dominated both by Japan and USA. China firmly believes that the setting up of AIIB (Asian Infrastructure Investment Bank) would reduce dependence on western backed lenders, such as the World Bank and ADB.
In a separate press report, it has been stated that, according to a study made by ADB, Asian nations would require funding of $800 billion every year till 2020 for developing infrastructure. India's partipation in AIIB would enable its easy entry into the Shanghai Cooperation Organization where, India, Iran and Pakistan have "observer" status now.
It is said that Shanghai Cooperation Organization (SCO), principally moved by China and Russia would be central in defining the "balance of economic and political power" in Eurasia!
It may be noted that, recently Russia and China signed the $ 400 billion gas pipe line, as mentioned above, and Dmitri Rogozin, deputy prime minister, stated in Delhi, that extension of this pipe line to India would be "one of the largest infrastructure projects that could be conceived".
In the meantime, India's vice president, Hamid Ansari joined Chinese president Xi Jinping and Myanmar President Thein Sein in the commemoration ceremony of the Panchsheel at the great hall of China, in Beijing, highlighting the achievements of the last 60 years, of adhering to the territorial integrity and sovereignty, mutual non-aggression and non interference in internal matters and peaceful coexistence.
The developments in Indo-China relations, in the recent weeks, have come to show the importance attached by both sides in trying to move on by establishing greater emphasis on trade and putting the geopolitical issues on the back-burner.
While India wants to set up technical parks in China, mainly in Pharmaceutical and Information Technology sectors, there is growing interest in setting up similar parks in India, in UP, Andhra Pradesh, Gujarat, Maharashtra and Karnataka. A 20-member delegation from China have already visited India and shortlisted three locations near Sanad in Ahmedabad district, Gujarat, to set up their units in the industrial park, with an initial investment of $1 billion.
It is reported in the press that Dr Nirmala Sitharaman does not consider China as a "threat", but rather views it as an "opportunity" as many things that China presently exports to India could be easily produced here whereby employment potential would increase. Already Chinese firms like Huawei and ZTE have invested in India but security clearances have not been easy. China has shown interest to fund 30% of India's infrastructure requirements.
In a separate development, China's foreign minister Wang Li has confirmed during his recent visit to India that President Xi Jinping would plan a visit to India. Wang, as reported above, has come as a special envoy of President Xi Jinping and has stated that "China stands by your side throughout your efforts of reform and development and in your pursuit of dreams". He expressed confidence that both sides could address differences over the boundry disputes" and insist on "managing differences through dialogues instead of confrontation".
These assurances are extremely pleasing to hear and it is hoped that both sides settle their differences and strictly adhere to the principles enshrined in the Panchsheel. China needs to give up its territorial extension in claiming Aruna Chal as its territory and show their integrity in returning the occupied Indian lands illegally surrendered by Pakistan.
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)