Sensex, Nifty may see staggered upmove: Thursday Closing Report

The Nifty has to hold above the low of 4,837 for it to rise from the oversold position it is in

The market overcame the European fears and closed marginally in the positive amid volatility in the late session. We had mentioned in Wednesday’s closing report that the Nifty has to hold above the day’s low of 4,837, for the gains to continue. We continue to maintain this trend. Today the index opened higher; witnessed a higher high and higher low, which was last seen on 2 May 2012, the first day of the current downtrend. The National Stock Exchange (NSE) saw a lower volume of 57.76 crore shares

The market witnessed a gap up opening, supported by gains in the Asian pack in morning trade on reports that the Japanese economy grew at an annualised 4.1% in the January-March quarter following rebuilding efforts after the devastating earthquake and ensuing tsunami that stuck the north-eastern region of the country. On the other hand, markets in the US closed down after reports suggested that the European Central Bank (ECB) has stopped liquidity support to some Greek banks until they are capitalized.

Back home, the Nifty opened 21 points higher at 4,879 and the Sensex moved 89 points up to resume trade at 16,119. Early gains were also aided by a recovery in the rupee, which gained 29 paise to 54.20 against the dollar, from Wednesday’s record low of 54.56 to a dollar.

Buying in fast moving consumer goods, realty, banking and power helped the indices gain momentum in subsequent trade. The benchmarks hit their intraday highs at around 10.40am. At the highs, the Nifty rose to 4,922 and the Sensex scaled 16,240.

However, profit booking at higher levels soon saw the market paring early gains. The losses increased as the European markets opened weak. Downgrades of Ashok Leyland and Larsen & Toubro by global brokerage Nomura also weighed on investors.

The indices pared all gains and ventured into the red on selling in technology, capital goods and healthcare sectors. Besides, the rupee hit its intraday low of 54.48 to a dollar, after witnessing a mild recovery this morning.

Although the fall was short-lived the market continued to face volatility and settled with minor gains. The Nifty closed 12 points higher at 4,870 and the Sensex added 40points to finish at 16,070.

The advance-decline ratio on the NSE was in favour of the gainers at 732:679.

The broader indices settled almost unchanged, with the BSE Mid-cap index adding 0.02% and the BSE Small-cap index inching 0.09% higher.

The sectoral gainers were led by BSE Fast Moving Consumer Goods (up 1.90%); BSE Realty (up 0.89%); BSE Oil & Gas (up 0.44%), BSE Metal (up 0.40%) and BSE PSU (up 0.18%). The key losers were BSE Capital Goods (down 2.14%); BSE Consumer Durables (down 1.19%); BSE Auto (down 0.83%); BSE Power (down 0.41%) and BSE Healthcare (down 0.34%).

ITC (up 3.14%) was the top gainer on the Sensex today. It was followed by Jindal Steel (up 1.98%); DLF (up 1.68%); HDFC (up 1.59%) and State Bank of India (up 1.56%). The main laggards were Mahindra & Mahindra (down 3.57%); Larsen & Toubro (down 3.51%); Cipla (down 2.90%); Bajaj Auto (down2.69%) and BHEL (down 1.51%).

The top performers on the Nifty were Ambuja Cement (up 4.57%); SAIL (up 4.02%); ITC (up 3.56%); Jaiprakash Associates (up 2.97%) and Jindal Steel (up 2.71%). Reliance Infrastructure (down 3.56%); L&T (down 3.50%); M&M (down 3.34%); Bajaj Auto (down 2.74%) and Cipla (down 2.55%) settled in the negative.

Markets across Asia settled mostly higher following bargain hunting after recent losses and reports of better-than-expected Japanese GDP growth in the first quarter. However, the fragile situation in Europe raised concerns about the growth in the global economy.

 The Shanghai Composite surged 1.39%; the KLSE Composite gained 0.53%; the Nikkei 225 advanced 0.86%; the KOSPI Composite rose 0.26% and the Taiwan Weighted climbed 1.69%. Among the losers, the Hang Seng declined 0.31%; the Jakarta Composite tanked 1.61% and Straits Times fell by 0.30%.

At the time of writing, the European indices were down between 0.55% and 1.06% while the US stock futures were mixed.

Back home, foreign institutional investors were net sellers of shares totalling Rs546.85 crore on Wednesday while domestic institutional investors were net buyers of equities amounting to Rs171.83 crore.

Mahindra Satyam has tied up with FirstCarbon Solutions to offer sustainability monitoring services. The Indian IT services major will offer FirstCarbon’s sustainability and environmental consulting solutions and software services initially in the UK with plans to expand it to other areas where the company operates. The stock tanked 3.89% to settle at Rs66.75 on the NSE.

IL&FS Engineering and Construction Company has bagged an order worth Rs233.93 crore from Rail Vikas Nigam, Mumbai. The order is for the construction of Roadbed, Major and Minor bridges, track linking (excluding supply of rails, ordinary track sleepers and thick web switches), outdoor signalling and electrical (general) works in connection with doubling of Bhigwan-Mohol section, part of Daund-Gulbarga doubling in Central Railway’s Solapur division in Maharashtra.

The project is to be completed within 42 months from the date of commencement of work. The stock gained 4.78% to close at Rs57 on the NSE.

DLF, the country's largest realty firm, and Haryana Urban Development Authority (Huda) have joined hands to construct a 16-lane road covering 8.3km in Gurgaon at an investment of up to Rs600 crore to ease heavy traffic flow in the city. DLF gained 1.82% to settle at Rs185 on the NSE.


Personal Finance Exclusive
Did New India overcharge lakhs of policyholders? – III

IRDA has been watching benignly even though New India Assurance has been stalling queries, confusing issues and has decided to offer refund only to a fraction of the policyholders

For the last 40 months, New India Assurance has tried hard to stall Anant Meghji Nandu, who blew the whistle on New India overcharging certain policyholders, through a RTI query. At a hearing called by the Central Information Commissioner, (CIC) held on 10 May 2012, Insurance Regulatory and Development Authority (IRDA) was told to provide information about IRDA’s actions in this case based on the RTI filed by Mr Nandu with IRDA in September 2010.

At the same hearing, the regulator submitted its response from New India Assurance that they have advised their offices to refund excess premium or adjust it against the next renewal. There is no proof that the insurer has actually done this. The recently updated webpage of New India Assurance still shows that only 3,534 out of 30,187 policyholders were refunded the money. The actual number of policyholders who are affected could be more due to the discrepancy between the date of overcharge (29 May 2008 or 16 August 2007). Instead of grilling New India about this, IRDA accepted its submission without verification.

The CIC is not convinced of the insurer’s actions to bring transparency in its refund information which is evident from its decision notice 12 on April 2012 hearing: “Commission finds it difficult to accept the explaining away of this variance by the respondent Central Public Information Officer (CPIO) in the actual date of reduction/revision of premium rates and the date posted on the website by stating that the automated system of accounting used by the company had automatically revised the rates of the mediclaim of receipt holders and refunded the excess payment. Respondent has not been able to provide any explanation as to why they have declared 29 May 2008 and not 16 August 2007 as the effective date for reduction/revision of the premium rates for renewal of mediclaim policies.” This should have alerted IRDA about something really amiss in this case.

Even New India Assurance has agreed that 30,187 policyholders’ were charged excess premium, without giving the names or policy numbers which were overcharged. Based on rough estimate of minimum Rs1,000 overcharge per customer, the insurance company officials accept that they could owe customers Rs3 crore. In reality, the number could be much higher due to the discrepancy of dates (16 August 2007 instead of 29 May 2008) for which New India Assurance is trying to confuse everyone. At a minimum, can IRDA verify if New India Assurance has refunded the excess for all the 30,187 customers?

Mr Nandu had written to the IRDA chairman on 17 February 2012 urging him to make the insurer refund the policyholders’ who were overcharged for nine months from 16 August 2007, which could be in lakhs. Moneylife had written to IRDA on 12 May 2012, but there has been no response till the time of publishing this article.

Given New India’s attitude and IRDA kid-glove approach, the question is who will protect the genuine interests of individuals? It is always the individual policyholder who is at the receiving end. If this mistake had happened with a company, New India would have behaved differently. The matter would have been settled by the insurance company without escalation to IRDA level. The insurance company knows that most individual policyholders’ cannot really fight for themselves. Many would not even know that they have been shortchanged. Hence, it wants to settle individual complaints on a case-by-case basis rather than offering refund to all. It was IRDA’s responsibility step in on behalf of individuals and this is a perfect case for class action. Will IRDA act or remain on the side of New India?

On 20 March 2012, IRDA had let off the New India on another case. It was a complaint by one policyholder Bhagi Ramanath. The warning states that New India Assurance should refund the excess premium charged to the concerned mediclaim policyholders who have made similar complaints. Is this justice? According to Moneylife, IRDA should have told New India Assurance to refund excess premium to not just those who made complaints, but to everyone who got overcharged

Read 1st part of the article giving details of the issue Did New India Assurance overcharge lakhs of mediclaim policyholders? - I

Read 2nd part of the article on New India Assurance’s tactics to save face Did New India overcharge lakhs of policyholders? – II



C H Mahadevan

4 years ago

LIC is having a group mediclaim scheme with New India assurance Company for its employees numbering about 1 lac and retired employees and family pensioners numbering about 40000.From your series of articles it is not clear whether overcharging of premium could have taken place for group mediclaim beneficiaries also due to software glitch?Kindly enlighten.

Nagesh Kini FCA

4 years ago

New India is sadly mistaken if they think they can get away with blue murder.
I've filed an RTI application and a copy has been handed over to the IRDA chairman when he met with MLF.

Delhi HC dismisses plea of striking Air India pilots

The striking pilots can be tried for the offence of court of contempt by the single-judge bench, the HC said

New Delhi: Coming down heavily on striking Air India pilots, the Delhi High Court on Thursday said that they cannot "wilfully and flagrantly" disobey court orders to end their "illegal" strike and can face contempt action, reports PTI.

Rejecting the plea of Indian Pilots Guild (IPG), which is spearheading the agitation by over 200 pilots, the court said, "In our view, no litigant can avail of any discretionery remedy from the court by willfully and flagrantly disobeying the orders of the court."

The IPG had moved the court challenging the ex-parte order of a single judge on 9th May holding the strike as illegal, saying it was done without any authority.

A bench of justices Sanjay Kishan Kaul and Rajiv Shakdher said rather, the striking pilots can be tried for the offence of court of contempt by the single-judge bench.

"We could have directly proceeded with the contempt of court proceedings against you, but we leave it ot the single judge so that better sense will prevail on you (IPG)," it said.

The court had earlier reserved its order on the plea of IPG challenging the single-judge order which restrained it from continuing with the "illegal strike" by reporting sick and staging demonstrations.

The pilots were agitating over the rescheduling of Boeing 787 Dreamliner training and matters relating to their career progression under the banner of IPG.

The airline management has sacked 71 pilots including office bearers of the IPG.


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