A close above 5,635 on the Nifty will be the first sign that the downturn may be over. A close above 5,700 may give a strong push to the upmove
The Indian market pared its gains in late trade on selling pressure from power, consumer durables and healthcare stocks. A close above 5,635 on the Nifty will be the first sign that the downturn may be over. A close above 5,700 may give a strong push to the upmove. The National Stock Exchange (NSE) reported a higher volume of 70.38 crore shares and advance-decline ratio of 554:814.
The domestic market opened marginally higher as cautiousness prevailed about growth concerns in China as the country’s central bank said it will refrain from injecting fresh funds into the system despite the prevailing credit squeeze. The development saw markets in Asia in the negative in morning trade. Overnight, US markets fell over 1% on worries of the Federal Reserve tapering its bond buying programme later this year.
The Nifty opened 17 points up at 5,607 and the Sensex resumed trade at 18,602, up 61 points over its previous close. Intense volatility saw the benchmarks hover on both sides of their previous closing levels in morning trade. The market touched its low in the first hour trade. The Nifty fell to 5,570 and the Sensex slipped to 18,487 at their respective lows.
The market gained momentum in late morning trade on support from oil & gas, realty, banking, PSU and capital goods shares. Positive stock-specific news and a firm opening of the European markets also added the recovery.
Reports of the completion of the merger of Mahindra Satyam into Tech Mahindra, the Supreme Court rejecting a PIL against Ranbaxy and the ONGC arm OVL-OIL combine deciding to acquire Videocon’s stake in a Mozambique block saw these stocks gaining in trade today.
The gains expanded in the post-noon session enabling the market hit its intraday high. The Nifty rose to 5,666 and the Sensex climbed to 18,802 at their respective highs.
The market pared a major part of its gains in late trade on selling in power, IT and healthcare sectors but managed to end in the green. The Nifty settled 19 points (0.34%) higher at 5,609 and the Sensex gained 88 points (0.48%) to 18,629.
Markets across Asia recovered from early losses but most indices settled lower as the overnight interbank interest rates in China fell for a third day, the longest run of declines in a month on the Chinese central bank’s decision to refrain from taking steps to ease the liquidity crunch.
The Shanghai Composite fell 0.19%; the Jakarta Composite declined 0.24%; the KLSE Composite retreated 0.55%; the Nikkei 225 contracted 0.72%; the Seoul Composite dropped 1.02% and the Taiwan Weighted tanked 1.22%. Among the gainers, the Hang Seng rose 0.21% and the Straits Times gained 0.51%.
At the time of writing, the key European indices were up between 0.90% and 1.55% and the US stock futures were trading in the green.
Back home, foreign institutional investors were net sellers of stocks totalling Rs1,552.98 crore on Monday, while domestic institutional investors wee net buyers of equities amounting to Rs931.11 crore.
Once again, the market regulator has mindlessly forwarded suggestions from EAS Sarma, a highly respected former bureaucrat, to the SEBI Complaint Redress System or SCORES without understanding the difference between an investor's complaint and suggestion
EAS Sarma, former secretary to the Government of India, usually gets a response when he writes to various ministries or regulators. However, market regulator Securities & Exchange Board of India (SEBI) continued to show its indifference by sending Mr Sarma's suggestions addressed to its chairman, to SCORES, its grievance redressal system.
“Recently, I addressed the ministry of corporate affairs (MCA) on the increasing menace of shell companies with a suggestion to tighten the procedure of registration of companies to pre-empt unethical persons indulging in money laundering, etc. Copies of the letter were marked to Department of Economic Affairs (DEA), SEBI and Reserve Bank of India (RBI). Instead of examining my suggestions, SEBI has treated my letter as a ‘complaint’ and routinely forwarded it to its “grievance redressal” wing," Mr Sarma wrote in a letter.
In a letter addressed to Arvind Mayaram, Secretary, DEA in the finance ministry (who deals with these regulatory institutions), Mr Sarma said, “Apparently, SEBI had no clear understanding about the difference between a ‘grievance’ from an individual and a ‘suggestion’ from the public! If at all there is any grievance, it is the grievance of the public about the indifferent manner in which SEBI has been dealing with suggestions from the public.”
He said, “I had also written in the past to MCA and SEBI about the menace of multi-level marketing companies and pyramid schemes and the need to take pre-emptive measures. while MCA had reacted positively, SEBI had washed its hands off the issue by saying that it had nothing to do with such companies. I am sure that had SEBI and the other regulators taken coordinated action, scams such as the one that let down the investors recently in West Bengal would have been pre-empted.”
Earlier also whenever Mr Sarma had sent letters to Upendra Kumar (UK) Sinha, chairman of SEBI, the responses were startling. On 21 June 2012, Mr Sarma wrote two letters to the SEBI chairman about non-disclosure by Reliance Industries of vital information on the true status of gas reserves at the Krishna-Godavari basin. The letter was not even read. It was automatically diverted to SEBI Complaints Redress System or SCORES, SEBI’s web-based system. Mr Sarma got an automated reply saying that the complaint has been registered and he can seek redress directly from the company. ()
This was the same case in December 2012 as well. On 19 December 2012, Mr Sarma wrote to the prime minister about the scourge of multi-level marketing companies (MLM) that have been taking “full advantage of the soft regulatory structure to swindle unwary and financially illiterate Indians on a mind boggling scale.” The letter was copied to Mr Sinha of SEBI, too. The reaction from the SEBI chairman was identical to the first one. An automated reply directed Mr Sarma to lodge a complaint on SCORES, with a long explanation of the process.
In his letter to the secretary of DEA, Mr Sarma said he could cite other examples of the way SEBI has been functioning of late. “Such responses from SEBI do not reinforce the credibility of the government. As a statutory body, SEBI is expected to conduct itself in a manner that enhances its public accountability, not erode it,” he said.
According to the former secretary, a regulator like SEBI should exemplify transparency in its functioning as it is such transparency that lies at the heart of good corporate governance of the companies it is supposed to regulate. He said, “While the prime minister and his Cabinet colleagues have made voluntarily public disclosure of their assets, neither the chairman of SEBI nor any of its members has condescended to do likewise! Apparently, SEBI is not at all in a mood to function transparently, for reasons best known to it.”
Mr Sarma has requested Mr Mayaram to get these specific instances investigated to ascertain the manner in which SEBI has been functioning. “Also, in the interest of good governance, the DEA should advise chairman of SEBI to disclose his assets and sources of income to set an example to the corporate sector that he oversees,” the former secretary concluded.
It must be noted that SEBI came into existence with a preamble to protect investors. Unfortunately, investors are vanishing from the markets and everyone in the government is now trying to bring them back through financial literacy seminars and programmes. But looking at the treatment meted out to a very senior bureaucrat by SEBI, few investors left in the stock markets must be feeling disenchanted.