Sensex, Nifty may pause after tomorrow: Monday Closing Report

But the decline may be shallow

The market was range-bound throughout the entire session and settled with minor gains as investors adopted a “wait-and-watch” attitude ahead of the release of domestic economic numbers. We had mentioned on Friday that unless the Nifty breaks the previous day’s low, the trend is up for now. We may now see the uptrend pause. The index managed a higher high and a higher low today and settled with a marginal gain. The National Stock Exchange (NSE) saw a volume of 46.75 crore shares and advance decline ratio of 784:653.   


The market opened listless in the absence of any local triggers and having factored in the ECB bonds-buying programme, which was announced last week. Markets in Asia were trading mostly higher despite      a report showing slower growth in Chinese exports last month.


Back home, the Nifty opened three points higher at 5,362 and the Sensex resumed trade at 17,781, 31 points higher than its previous close. The market was range-bound amid volatile trade and hit its intraday high in initial trade itself. At this point the Nifty touched 5,375 and the Sensex rose to 17,811.


The benchmarks hovered on both sides of their previous close in subsequent trade. With major international events behind us, the focus will now be on the domestic economic indicators like industrial output numbers and headline inflation figures, which will be released later this week.


Meanwhile, with domestic car sales posting the biggest drop in 10 months in August by 18.56%, industry body Society of Indian Automobile Manufacturers today said its forecast of registering a growth of 9%-11% in this fiscal is unlikely to be met. While the August car sales stood at 1,18,142 units in August 2012 compared to 1,45,066 units in the same month in 2011, for the April-August period this fiscal it stood at 7,52,440 units as against 7,45,991 units in the same period last year, up 0.86%.


At the time of writing, two of the three the key European indices were positive and the US stock futures were in the negative, indicating a lower opening for US stocks.


The market continued to trade sideways in the noon session as the key European indices witnessed a soft opening, after notching over 3% gains last week following the ECB’s bond-buying initiative.


The market dipped to its lows at around 1.30pm with the Nifty falling to 5,349 and the Sensex went back to 17,728.  The indices lacked energy and settled flat as investors await the release of key economic indicators later this week, which may have a bearing on the RBI’s policy review, slated for 17th September.


The Nifty settled five points up at 5,363 and the Sensex added 17 points to close the session at 17,767.


It was the day of the broader indices, which outperformed the Sensex today. The BSE Mid-cap index rose 0.28% and the BSE Small-cap index gained 0.70%.


The top sectoral gainers were BSE Consumer Durables (up 0.99%); BSE Healthcare (up 0.95%); BSE Metal (up 0.71%); BSE Auto (up 0.49%) and BSE TECk (up 0.19%). The key losers were BSE Realty (down 0.78%); BSE Bankex (down 0.77%); BSE Power (down 0.44%); BSE Fast Moving Consumer Goods (down 0.23%) and BSE Capital Goods (down 0.05%).


Fifteen of the 30 stocks on the Sensex closed higher, they were led by Sun Pharma (up 2.63%); Bharti Airtel (up 2.32%); Coal India (up 1.76%); Tata Steel (up 1.63%) and Tata Motors (up 1.28%). The major index losers were Jindal Steel (down 2.16%); BHEL (down 2.15%); State Bank of India (down 1.80%); Tata Power (down 1.19%) and Wipro (down 1.17%).


The top two A Group gainers on the BSE were—Adani Enterprises (up 9.41%) and Manappuram Finance (up 5.39%),

The top two A Group losers on the BSE were—Reliance Communications (down 3.46%) and HDIL (down 3.27%).


The top two B Group gainers on the BSE were—Panacea Biotec (up 20%) and ARSS Infraprojects (up 20%).

The top two B Group losers on the BSE were—Arunjyoti Enterprises (down 16.61%) and Lloyds Finance (down 16.46%).


Out of the 50 stocks listed on the Nifty, 23 stocks settled in the positive. The top gainers were Sun Pharma (up 2.77%); Bharti Airtel (up 2.20%); Bajaj Auto, Coal India (up 1.71% each) and Tata Steel (up 1.27%). Axis Bank (down 2.89%); BHEL (down 2.32%); SBI (down 2.13%); Jindal Steel (down 1.86%) and DLF (down 1.47%) settled at the bottom of the index).


Markets across Asia closed mixed as details of slowing growth from China and Japan renewed hopes of fresh initiatives by their respective policy makers to spur growth. This apart, market participants are now focussed on the two-day Federal Open Market Committee meeting on 12th and 13th September.


The Shanghai Composite gained 0.34%; the Hang Seng rose 0.13%; the Jakarta Composite advanced 0.41% and the Taiwan Weighted surged 0.78%. On the other hand, the KLSE Composite lost 0.22%; the Nikkei 225dipped 0.03%; the Straits Times fell 0.10% and the Seoul Composite declined 0.25%.


Foreign institutional investors (FIIs) were net buyers of stocks totalling Rs19.39 crore in the brief trading session on Saturday. On the other hand, domestic institutional investors (DIIs) were sellers of stocks amounting to Rs7.54 crore. On Friday both FIIs and DIIs were net buyers of stocks—FIIs pumped in Rs502.18 crore and DIIs invested Rs218.29 crore.


Pharma major Venus Remedies today said it has secured its first patent from Canada for its antibiotic drug ‘Vancoplus’ and will roll out the product in that country in the next two years. The drug will provide treatment for typhoid, pneumonia, urinary tract infection, skin infection and other diseases. The stock jumped 4.63% to close at Rs296 on the NSE.


Adani Power today said it expects to earn as much as Rs 600 crore from trading of carbon credits from two of its units at the 4,620 MW Mundra project in Gujarat. Mundra plant’s phase III “becomes the world's first coal-fired thermal project to receive carbon credits from the United Nations Framework Convention on Climate Change (UNFCCC)”, the company said. The stock closed 3.05% higher at Rs42.30 on the NSE.


Future Group firm Pantaloon Retail (India) today said it will merge its wholly-owned subsidiary Future Value Retail, which runs Big Bazaar and Food Bazaar stores, with itself. Future Value Retail operates 148 Big Bazaar and 169 Food Bazaar stores, among other formats, in over 70 cities across the country. Pantaloon Retail closed at Rs148.40 on the NSE, up 3.34% over its previous close.


Political parties earned a whopping Rs4,662 crore in seven years!

According to a study, over the past seven years, while Congress earned Rs2,008 mostly from 'selling coupons', major part of BJP's Rs994 crore income came through donations from corporates and trusts owned by major companies

New Delhi: Political parties in India have 'earned' a whooping Rs4,662 crore through donation and other sources since 2004 with the ruling Congress at the top with an income of Rs2,008 crore followed by BJP at Rs994 crore, two non-governmental organisations (NGOs) claimed, reports PTI.
Relying on the Income-Tax (I-T) returns and list of donors submitted to the Election Commission (EC) for the period 2004-2011, Association for Democratic Reforms (ADR) and National Election Watch (NEW) released a report on the income of 23 major parties.
They said the income of parties showed a steady growth since 2004. Congress' earnings went up from Rs222 crores in 2004 to Rs307 crores in 2011 as is the case with BJP.
The figures compiled by ADR and NEW show that Congress' income is Rs2,008 crores, mostly through selling of 'coupons', since it began heading a government at the Centre in 2004 till 2011 though the percentage of donations is just 14.42%.
On the contrary, 81.47% of BJP's total income of Rs994 crore in the past seven years came through donations from corporate houses and trusts owned by major firms, including London-listed Vedanta, the NGO said.
The NGOs said donations and voluntary contributions seem to be one of the major sources of income for most of the political parties and demanded more transparency in functioning of electoral trusts run by corporates and that political parties must be declared as public authorities.
"It is a black box of the political parties. Basic source of corruption in this country is political funding. By regulating political funding, we cannot end corruption, but can make a major dent," Prof Jagdee Chhokar, Founder member of ADR, told a press conference. 
Interestingly, General Electoral Trust (GET) of the Aditya Birla Group and Torrent Power Ltd has given donations to both Congress and BJP. While GET gave Rs36.4 crore as donations to Congress, it contributed Rs26 crore to the BJP's coffers, according to the report.
While national parties like Congress and BJP got donations from corporate houses and trusts, regional outfits like the DMK have received lakhs of ruppees as donation from its own partymen.
Surprisingly, the CPI(M)'s income from 2004-2011 is Rs417 crore, mostly contributions from individuals who have given less than Rs20,000 each, just behind BSP's Rs484 crore, while other major Left party, CPI, has earned only Rs6.7 crore. The SP's income, according to ADR, is Rs278 crores.
ADR and NEW said these figures were collected after a protracted battle with political parties and Income Tax Department through the Right to Information (RTI) Act.

Other major donators to Congress are Torrent Power Ltd (Rs14.15 crore), Bharti Electoral Trust of Airtel (Rs11 crore), Tata's Electoral Trust (Rs9 crore), Sterlite Industries (Rs6 crore, ITC (Rs5 crore), Adani Enterprises, Jindal Steel and Videocon Appliances.
Again, GET has been the major contribuor to BJP's income by donating Rs26 crore, followed by Torrent Power (Rs13 crore), and Public and Politial Awareness Centre, which the NGos claimed belong to Vedanta, (Rs9.5 crore).
Another interesting fact that emerged was Asianet TV holding gave Rs10 crore to BJP and Rs2.5 crore to Congress in the past seven years.
The NGOs also said 18 regional or state parties have never filed their contribution reports to the Election Commission since 2004. Prominent among them include National Conference of J&K, Trinamool Congress and INLD.
The income of other parties are NCP (Rs160 crore), AIADMK (Rs59 crore), SAD (Rs25 crore), National Conference (Rs21 crore), JD(U) (Rs26 crore), TDP (Rs53 crore), DMK (Rs40 crore), Trinamool Congress (Rs9 crore), Shiv Sena (Rs32 crore), LJP (Rs4 crore) TRS and RLD (Rs10 crore each), Forward Bloc (Rs98 lakh) and Sikkim Democratic Front (Rs92 lakh), the least among all.

While BSP has declared that it has not received any donations above Rs20,000, the CPI said its leaders AB Bardhan and D Raja contributed Rs65 lakh and Rs21 lakh, respectively by collecting donations from various sources.

The NGOs also alleged that some of the companies whose names have been cropped up in the mining scam have also contributed to the political parties.

It also alleged that FRCA rules have also been flouted by parties which received donations from foreign-listed companies.

During 2009-2011, the TRS has 99.98% of its income coming from donations followed by JD(U) and LJP.




5 years ago

While one has to agree that fighting election in India is 'expensive', the argument that electoral politics is the main source or 'reason' for corruption is misleading.Perhaps, greed and sense of insecurity of people who somehow reach certain positions end up in a tendency for such people to slice away assets that pass through them to their pockets. Corruption is a lifestyle disease which is curable hundred per cent. Like any other addiction, the people who get into it refuse to get out and trap in people around them also.

anantha ramdas

5 years ago

On "donations" made to various political parties, is there a way of finding out how much was cash and other forms of traceable payments like cheques, drafts etc?

A "donation" collector presumably dips his/her hand in the kity and maybe everyone concerned knows, but they dont talk about it, because, they "are in it, together".

what a way generate and pass the black money and make it white and "pure", shall we say?



In Reply to anantha ramdas 5 years ago

Thanks for your comment, Sir. May we request you to kindly check the document file in this story. From page 15 onwards, you will find the donations and payment mode.

Madhur Kotharay

5 years ago

One of my good friends who is pretty high up in a national political party told me that it costs about Rs 15-20 crores per seat to run the national elections. If a party is going to contest even 400 seats, they would need Rs 6000 crores just to compete the national elections, leave alone state assembly elections.

So Rs 1000-2000 crore is not really a whopping amount. In fact, it is pittance for a national party, given its cost structure. Calculate it per seat: 5000 volunteers, 1-3 months of campaign - their transport & food, hoardings, etc.

My friend hinted that the main cause of most corruption is this cost of running the electoral politics. He said that even the cleaner-appearing parties indulge in courruption some form or the other, just to survive. There is just no escape for anyone.

If anyone thinks that these tens of thousands of crores of bribes taken go just into politicians' pockets, they are mistaken. What use a politician has for one thousand crores if he cannot use it for himself or his family? Most people has no clue that it is practically impossible to spend 100 crore of black money for oneself. Try to think of a way of doing that without attracting some kind of scrutiny!

Electoral reforms will be a starting point if we want to curb the corruption.

Tech Mahindra: It's time has come, at last, says Espirito Santo Securities

With most of the operations being rationalised and just financial integration pending post-merger, is this a good time to buy the Tech Mahindra share? Yes, says Espirito Santo Securities

Barring announcement of large deals from BT (British Telecom), only to be downsized later, Tech Mahindra has had very few moments to cherish post the IPO (initial public offer) in 2006, says Espirito Santo Securities in its market update report. However, with Satyam now back into its groove (it is expected that there will be a 10% revenue growth in FY13E) and Tech Mahindra seeing traction in large deals, it is expected that there will be similar growth rates for Tech Mahindra as well. 
But with most of the operations being rationalised and just financial integration pending post-merger, is this a good time to buy Tech Mahindra? “We definitely think so” says Espirito Santo Securities.
Some of the concerns that investors commonly have in acquiring Tech Mahindra share are addressed below:
Concern #1: Revenue growth in Tech Mahindra will remain subdued: Without the Hutchison BPO deal, growth would have been in low single digits, but with this deal it is estimated that Tech Mahindra’s growth is at 10% in FY13. In FY14, Tech Mahindra can maintain revenue growth of 10% as AT&T, though a large account for Tech Mahindra, could easily grow by 10%. It is estimated that there are four more outsourcing deals in the pipeline from Europe which could materialise in H2FY13.
Concern #2: Revenue growth of Satyam is not sustainable: Espirito does not see downside risk to Satyam’s growth trajectory as: i) the company’s average revenue per client is only $4.2 million Vs $10 million for Infosys, implying plenty of opportunity to mine existing clients, ii) the company’s focus on mining the top 30 clients is easily workable as the top client contributes only $164 million in annual revenues while the next four contribute an average of $58m, which implies significant room for penetration Vs peers (70-80 clients are Fortune 500 clients). It is expected that there will be 10% growth in revenues n FY13E.
Concern #3: Consolidated margins are not sustainable: Tech Mahindra’s EBITDA margins fell from 23.8% in Q3FY10 to 15.3% in Q2FY12 due to: i) decline in realizations from the BT account, ii) higher growth in BPO, and iii) large deals with Etisalat and Sing Tel during the period. However, with i) significant declines in BT over with in the near term and room for growth in AT&T, and ii) cost rationalisation underway, and consequently, there are enough margin buffers at Tech Mahindra. Secondly, Satyam has margins of 21.7% and room to improve its bulge mix. Post the merger, it is believed that the company has ample buffers to manage margins.
Valuations are now cheap on a consolidated basis. It is estimated that there will be a consolidated profit of Rs1,840 crore in FY14 and earnings per share of Rs90, after extinguishing treasury stock, which is a 23% discount to HCL Tech.


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