Nifty will be headed lower unless it closes above 6,300 on Monday
Today’s plunge in the Nifty wiped off almost all the gains made in the past four trading days. The market sentiment was hit adversely by Reserve Bank of India (RBI) governor Raghuram Rajan's comments on Thursday that inflation is a “destructive disease” that is the cause of high interest rates.
The Sensex and the Nifty opened today in the negative and continues to move down. The Sensex opened at 21,289 and immediately after hitting a high of 21,334 the index side down to hit a low of 21,124 and almost at the same level at 21,134 (down 240 points or 1.12%). The Nifty opened at 6,302 and went to hit a low of 6,264 after hitting a high of 6,331. The index closed at 6,267 (down 79 points or 1.24%). The NSE recorded a volume of 51.62 crore shares.
"Industrialists complain about high interest rates but we don't have a choice but to keep interest at a high rate because inflation is high at 8%", Rajan said. The strong warning against inflation comes ahead of the central bank's policy review early next week.
A Reserve Bank of India panel earlier this week recommended making inflation the “predominant objective” of monetary policy. The finance minister Palaniappan Chidambaram said the central bank must keep the objective of supporting growth. Differing opinions over how best to tackle Asia’s fastest inflation signal a lengthy debate that won’t be settled soon.
India is not planning any changes to its record import duty on gold and other restrictions on imports until the current account deficit is firmly under control, the finance minister told a television channel.
US indices closed in the negative on Thursday.
The US flash purchasing managers index slipped to 53.7 in January, down from December's level of 55, which was an 11-month high. This is the slowest improvement in conditions since October. US initial jobless claims rose slightly to 326,000 last week. The leading economic index rose 0.1% in December, marking its sixth gain in a row, the nonprofit Conference Board said Thursday. In the housing sector, sales of existing homes rose 1% in December to a 4.98 million annual rate, while the median sale price climbed 9.9% to $198,000.
Except for Shanghai Composite (up 0.60%) and Taiwan Weighted (up 0.04%) all the other Asian indices closed in the red. Nikkei 225 was the top loser which fell 1.94%.
European indices were trading in the red.
Fitch Ratings today affirmed Germany's credit rating at AAA with a stable outlook, citing a decline in the debt level of Europe's biggest economy. “Germany continues to have the components of a declining public debt path,” Fitch said in a statement. “The economy is growing, the budget position is relatively favorable and nominal interest rates are low.”
US Futures too were trading lower.
Ranbaxy Laboratories shares plunged nearly 20% on Friday after US FDA banned drug imports from its Toansa plant in Punjab
Ranbaxy Laboratories (Ranbaxy) shares prices plunged 20% on Friday and hit an intra-day low of Rs334, after confirmation the US Food and Drug Administration (USFDA) banned supplies from Ranbaxy’s Toansa plant in Punjab.
Ranbaxy in its press release said, “US FDA notified the company that, it is prohibited from manufacturing and distributing active pharmaceutical ingredients (APIs) from its facility in Toansa, India, for FDA-regulated drug products.”
Earlier on 11 January 2014, US FDA identified significant current good manufacturing practice (CGMP) violations at Ranbaxy’s Toansa plant. Violations included Toansa staff re-testing raw materials, intermediate drug products, and finished API after those items failed analytical testing and specifications, in order to produce acceptable findings, and subsequently not reporting or investigating these failures.
As a result of this action, Ranbaxy is now prohibited from manufacturing API for FDA-regulated drugs at the Toansa facility and from introducing API from that facility into interstate commerce, including into the United States, until the firm’s methods and controls used to manufacture drugs at the Toansa facility are established, operated and administered in compliance with CGMP.
“This development is clearly unacceptable and an appropriate management action will be taken upon completion of the internal investigation,” said Arun Sawhney, chief executive officer and managing director of Ranbaxy Laboratories.
Ranbaxy said in its press release that, it had voluntarily and proactively suspended shipments of API from this facility to the US market when it received the inspection findings during first week of January 2014. It also stated: “Ranbaxy is disappointed with the recent FDA action and would like to apologise to all its stakeholders for the inconvenience caused by the suspension of shipment.”
Ranbaxy has had a history of procedural violations in its plants. Earlier in May 2013, Ranbaxy the unit of Japanese Daiichi Sankyo, paid $500 million to settle similar charges relate with manufacture and distribution of certain adulterated drugs made at Paonta Sahib and Dewas in India.
Again shortly after, in July 2013, Ranbaxy Laboratories has agreed to pay about $420,000 to settle civil and criminal complaints of selling drugs of inferior strength, purity or quality Idaho state in north-western US.
US FDA in a statement said that, the agency is evaluating potential drug shortage issues that may result from this action. If the FDA determines that a medically necessary drug is in shortage or at risk of shortage, the FDA may modify this order to preserve patient access to drugs manufactured under controls that are sufficient to assure quality, safety and effectiveness.
On Friday, Ranbaxy Laboratories closed 19.54% down at Rs335.65 while 30-share benchmark Sensex closed 240 points down at 21,133.
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A case where a Thane RTO PIO had ordered an RTI applicant to fork over a whopping Rs55.44 lakh pertaining to auto-rickshaw permits was overturned by the chief information commissioner, Ratnakar Gaikwad and he ordered the state transport commissioner to disclose information
The chief information commissioner (CIC), Ratnakar Gaikwad, overturned Thane Regional Transport Office (RTO) public information officer (PIO) decision to make RTI applicant pay Rs55.44 lakh and has ordered the state transport commissioner to provide the computerised information regarding auto-rickshaw permits free of cost on a CD to RTI applicant & activist Anil Mahadik. The order further said that the RTI applicant should be allowed to inspect the non-computerised data and up to 1,000 pages can be given at free of cost by registered post/personally given till 12 February 2014.
Earlier, Anil Mahadik had filed an application on November 18, seeking details of auto-rickshaw permits, believing there could be malpractices within. RTI activist, Anil Mahadik, was told by the state transport commissioner that there were 73,993 registered auto-rickshaws and 36,887 auto-rickshaw permits, and that he had to pay Rs50 per permit and the same amount per registered auto-rickshaw. Therefore, the total amount comes to Rs55.44 lakh [(73,993 * 50) + (36,887 * 50) = Rs55.44 lakh].
However, he was stone-walled when the public information officer blocked his request by asking him to fork over a fee of Rs54.44 lakh! Even the first appellate authority upheld the PIO’s ruling. Anil then filed a complaint against the chief information commissioner Ratnakar Gaikwad about this episode. Along with Bhaskar Prabhu, Anil Mahadik successfully made their case to the CIC. It was decided to rule in favour of Mr Anil Mahadik, that information pertaining to auto-rickshaw permits should be displayed suo moto on the website as per provisions of Section 4 (1) (b) of the Right to Information Act. The same must be done before 28th February. The CIC called the PIO attitude "irresponsible behaviour and lack of knowledge of the law"
Shailesh Gandhi applauded this ruling and said, “I congratulate Anil Mahadik, Bhaskar Prabhu and Mr Ratnkar Gaikwad for this order. Suo moto disclosures under Section 4 of the RTI Act of most information, sought by citizens, are the way to take transparency and accountability forward.”
Below is the attached order in Marathi.