Sensex, Nifty may stage a rally if last week's low holds: Weekly closing report

A slight strength in rupee can spark a market rally. This very likely since dollar has been weakening over the last week.

The holiday shortened week too ended in the negative for the third consecutive time. Market moved down on the concerns of weakening rupee and on growing uncertainty over when the Federal Reserve will start to wind down its stimulus.


The Sensex lost 375 points (or 2%) to close the week at 18,789 and the Nifty settled at 5,566, down 112 points ( or 2%). The market has been down three weeks in a row.


On Monday, the indices rose marginally, bucking the seven-day continuous fall. The HSBC India Composite Output Index, which maps both services and manufacturing activity, fell to 48.4 in July from 50.9 in June, indicating an overall contraction. On Tuesday, the indices had the highest absolute fall since 20 June 2013. The indices were pulled down with the rupee hitting its record low. After market hours, news came in of the appointment of Raghuram Rajan, the country's chief economic advisor to the finance ministry, as the 23rd governor of RBI. On Wednesday too, the indices fell on the concern over the US economic data. Market participants expected the Fed to bring in its asset-purchase program by the end of the year. On Thursday, the indices closed in the positive after China reported much better than expected trade results for July, marking a sharp recovery from the previous month.


Among the indices on the NSE, India Volatility (up 1%) and Nifty Midcap 50 (up 1%) were among the top gainers this week, while CNX 100 (down 2%) and CNX 200 (down 2%) were among the losers.


Among the other indices, Metal (up 5%) and Realty (up 3%) were among the top gainers this week while Finance (down 3%) and Pharma (down 3%) were among the losers.


The top gainers on the Nifty this week were Ranbaxy Lab (up 32%); Jindal Steel & Power (up 11%); Reliance Infrastructure (up 11%); Tata Steel (up 8%) and DLF (up 8%). BHEL (down 22%); Asian Paints (down 13%); Lupin (down 10%); Sun Pharma (down 9%) and Tata Power (down 8%) were the top losers this week.


Out of the 27 main sectors tracked by Moneylife, the top five and the bottom five sectors were:



Top ML sectors


Worst ML sectors




Foods & Beverages


Non-ferrous metals


Consumer durables








Financial services




Consumer products



The first meeting of the sub-committee of Financial Stability and Development Council (FSDC), chaired by RBI Governor D Subbarao was held on Wednesday, where the participants discussed the “potential risk to stability of the domestic financial system”. The sub-panel also expressed concern on the deteriorating asset quality of public-sector banks and discussed corrective measures for this.


The second meeting, of the high-level committee on external commercial borrowings (ECBs), discussed measures to relax ECB norms to allow leveraged firms to tap foreign markets for funds, and to repay rupee loans from ECB proceeds.


Market fall and the issue of corporate governance

The recent market fall is not all about economic crisis. Implementation of healthy corporate governance is another factor that led to the wreck

If you think that the fall in share prices of major companies during last two months has happened only because of prevailing economic crisis in India, it is time to think again. While there is no doubt economic crisis has eroded value of many stocks, what has added fuel to the fire is the deficiency in implementation of healthy corporate governance practices by several companies. Investors have lost huge amount of money not only because of volatility but also because of non-compliance with corporate governance policies by many companies. Corporate governance practices exist only in glossy pages of annual reports of these companies and are yet to be implemented in its true spirit. Let us look at some cases to understand this.

Yes Bank’s share price, a darling of many analysts and investors, has fallen to around Rs280 from its all-time high of Rs547, in a span of less than three months, which means about 50% loss in the value. Share price of the Bank fell by 17% on 31 July 2013, when the corporate governance issue came to the fore. Madhu Kapur, the widow of Ashok Kapur, one of the promoters of the bank along with Rana Kapoor, raised corporate governance issues in an affidavit filed before the Bombay High Court over the rejection of her daughter Shagun Gogia’s nomination as a director.

Another company, Gitanjali Gems, has been in news for multiple reasons. Share price of the company has already tanked more than 90% from its all time high and nobody knows what will be the lowest level for the stock. After market regulator Securities and Exchange Board of India (SEBI) cracked down on Prime Securities, the stock price of Gitanjali Gems started tumbling. This was a case of alleged market price manipulation and lack of transparency and can be associated with deficient corporate governance practices once again.

Recent fall in shares of Financial Technologies and Multi Commodity Exchange Of India Ltd (MCX) are also broadly linked to corporate governance issue in which though regulator failed to take note of regulatory deficiencies, the company also did not set high standards of voluntary compliance with regulation.

There are many such examples in the recent times where companies have failed to follow corporate governance practice causing huge loss to the shareholders. Opto Circuits is one such example, where the share price had tumbled at the beginning of the current year after it failed to notify resignation of its company secretary on time. Once a premier stock, it has now become a penny stock. Infosys also faced issues of corporate governance when Narayan Murthy re-joined the IT company thus raising doubts on high standards set by him, though this did not cause loss to the shareholders.

There are many companies, which have lost more than 90% of the value over the last one year. Many of them have seen unprecedented fall in the share price because of corporate governance issue.

In India, companies fail to meet even the basic tenants of corporate governance. Let us look at transparency, which is one of corner stone of corporate governance.  ITC on its approach to corporate governance, mentions its approach towards transparency as, “ITC believes that transparency means explaining Company's policies and actions to those to whom it has responsibilities. Therefore, transparency must lead to maximum appropriate disclosures without jeopardising the Company's strategic interests. Internally, transparency means openness in Company's relationship with its employees, as well as the conduct of its business in a manner that will bear scrutiny. We believe transparency enhances accountability.”

This sounds great and ITC has been following this aspect of corporate governance. However, do all the companies follow it? ‘Conduct of business in a manner that will bear scrutiny’ evades many companies. Shareholders, especially the minor ones, have no idea about such transparency, as many companies do not find it necessary to be transparent. Minor shareholders are the ones who suffer major losses. The recent case of NDTV highlighted by Moneylife points this aspect.

While companies are expected to take responsibility to set exemplary standards of ethical behaviour, both within the organisation as well as in their external relationships, there are cases like the Micromax, where the mobile handset maker’s MD is caught allegedly bribing MCD officials. Other constituents of corporate governance such as, trusteeship, empowerment and accountability, continue to evade many companies.  Companies like Educomp reach a stage where salaries not paid for long time to the employees with management justifying the failure as the risk arising from prevailing market conditions thereby putting aside failure of proper corporate governance compliance.

A series of lapses on corporate governance front shows the risk that Indian investors are exposed to. We know that a chain is as strong as its weakest link. The deficiency on corporate governance front is working out as the weakest link in case of many Indian companies. Time has come when we should not buy stocks only on the basis of fundamental and technical analysis. Need of the hour is corporate governance analysis. Unfortunately, the data points available here are very limited.


National Land Reform Policy - how realistic is it?

Free-gifts are often ‘recycled’ and in the case of a landless peasant, nothing prevents this legacy being misused. Giving land on a free of cost basis is a grave mistake that any government can make, as this simply will kill the initiative to create wealth

The National Land Reform Policy that has been prepared by the Rural Development Ministry, in its draft form, is in circulation, which is based on the consultations with other ministries.


As and when it is passed, it is likely to be a crowning achievement for Jayaram Ramesh, the minister and will give a tremendous boost to the Congress party when the elections are held in 2014.  The opposition are now between the devil and the deep sea-they cannot oppose the Bill as it will cost them a heavy turn against by it beneficiaries, and so, they need to find a way to support it to garner public support!


What does this National Land Reform Policy propose to achieve? It proposes to redistribute excess government land to the landless poor, cover every single village in the country and provide equal opportunity and right for women to own their land. In India, traditionally land has always been "owned" by the "karta" or head of the family, though, in some parts (mostly South) land has been bequeathed to daughters by their parents. Joint ownership has been possible. Land has been given as a part of "dowry" where the benefits accrue to the women, but she cannot sell it!


The available statistical land data shows that 47% of land is used for agriculture; 22.6% is forested and 13/6% is fallow. From time to time, poor monsoon rains or floods have played havoc with our agriculture.


While the full details of the Policy have not been made public, presumably because of the expected comments and suggestions from various state governments, who have to play a vital role in its execution, this proposal will be gigantic in operation. The actual process of identifying excess government land, separating agriculture and non-agriculture categories and ensuring that these are not illegally occupied and used is not easy task to comply. It is a tall order, implementation of which, will take at least a decade or two, considering the country's size, population and various customs and practices in different states.


We must bear in mind that, in the recent past, land acquisitions have caused enormous problems in setting up huge industries in many parts of the country, POSCO, ArcelorMittal, Zuari and Tata Motors being recent examples. Therefore, for the time being, we shall restrict our thoughts to the National Land Reform Policy and how it can be implemented.


Looking at agriculture, a large percentage of workers is bonded labour of one kind or another. Land-owning farmers who actually till their own land are a minority. Because agriculture is a seasonal in nature, there has been migration of farm labour to the towns and cities, specially the "landless" people. The intention of this Reform policy is laudable, but these farmers have now settled outside villages, in towns and cities, and will therefore have to be enticed to return back to their roots and take up agriculture again. Not an easy task, by any means!!


The landless labour who are now working for a pittance for the land owning zamindars and feudal lords, though we do not "accept" their presence anyway, will now want to "lodge" in their claim for getting free-land from government under the Reform Policy, thereby creating a labour vacuum in the present setup! That these labourers may be deep in debt owing their lifetime in servitude to the landowners or the moneylenders in these villages are more horrendous issues to write about.


Surely, all these factors may have crossed in the minds of authors of this Proposal. It, however, remains to be seen how they propose to handle these explosive issues, when the details are made public. This we shall await with interest.


It must be admitted that the Reform Policy is practically a time bomb that will explode if all these factors are not suitably covered and amendments are made as we go along. Or, it may be worthwhile, for the government, to implement this policy, on a trial and error basis, starting with one state, and slowly moving on to the others.


If at all such a distribution of excess land is mandated, it must be ensured that the government fixes a price/value for the land allotted, but ensuring that the ownership can be only acquired after a certain period of actual use, and that too on paying the price determined at the outset. And to ensure that this is not misused, the law must provide that such land cannot be sold at all, and that it can be transferred to the members of the family, who must continue to be involved in agriculture. And to ensure all these happen, if the farmers are returnees from cities and towns, proper rehabilitation must be provided.


We must remember that free-gift has no value in society today. In simpler sense, it is ‘recycled’ and in the case of a landless peasant, nothing prevents this legacy being misused.  Giving land on a free of cost basis is a grave mistake that any government can make, as this will simply kill the initiative to create wealth.


We must remember to teach a person to catch a fish; not give it free!


(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was 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.)



Sunil Patil

3 years ago

This is too much , the land reforms is being suuggested by people who lack the basic knowledge of Agriculture and the economy related to it . The policy of new sealing act as proposed in the draft will further decrease the agriculture produce and thus add to the number of poors of this country . I want to ask Mr Jairam Ramesh how can a non irrigated land of 15 acres take care of the needs of upto 10 members of family .If such a policy comes into being then god help the farmers whose only source of income is agriculture , there will be more cases of suicide ,bankruptcy, debt . The farmers who are helping thier family and also employing labours will find it difficult to survive. This policy is absurd and seems to have a larger conspiracy in bringing corporate farming .As farming won't be viable with such small portions of land and then corporates would be introduced who would then take these lands on lease from the farmers . If such is not the case then please Mr Minister try to understand that having small portions of agriculture lands will make farmers even poorer and those who get the benifit from this also wont be able to take the benifit from such a proposal because they wont earn sufficiently from these small land holdings .You cant plan to make farmers labourers of the corporates .


Dayananda Kamath k

In Reply to Sunil Patil 3 years ago

the land bill has been brought only to benefit the politicians. it is the politicians who get the first information about land acquisition. so they can buy land and then sell it at 4 times the market value and get all the benefits. but who is coming to invest in india if for land you have to pay 4 times the market value. in equity you may demand 4 times the current market rate for shares you are selling today.


3 years ago

First give the correct price to the crops, it will be be a big reform in country. without proper price, the farmers have to suicide for losses.


3 years ago

first govt have to check all family member & then redistribute the land for landless people in my family there are min 10 member we have only 50 acre farm but income of that farm is only 9 lac per year in that 9 lac we have to spend money 5 lac for home & education



In Reply to sanjay 3 years ago

we r not happy with this land ceiling act we r happy with old land ceiling act
jay hind jay maharashtra


3 years ago

Hello Dr Ramdas and Mr Nimbalkar
There is a specific provision for redistributing land in the proposed Land Reform Policy Act, To add more to problem there will be division of land based on household not individual. The core idea is to increase land holding on household basis. Therefore, the proposed policy will make agriculture unsustainable and drive profitable large farmers to be marginal farmers. If you need additional details please email me on [email protected]. Mr Nimbalkar I belong to farming family from Maharashtra (Sholapur District). All your assessment of past ceiling limits laws is correct and if the government does not learn for the past mistakes we are helpless. Its better we organize and fit back to populist policies.

Prakash Chhotulal Patel

3 years ago

God save our country from Sonia Gandhi and Jairam Ramesh.
Sonia for Food security bill and Jairam Ramesh for Land Reform Bill.
politicians do not know problems of indian agriculure.Farmers don't get workers even at the high wages as nobody wants to work,thanks to guarenteed wages in MGNREGA.Farmers are going for those crops where their is minimum labour is required like sugarcane which is water intensive.Over exploitation of ground water is leading to water table going down acompanied by increasing soil salinity.It is learnt that by this bill Ramesh also want to reduce land ceiling limit.He must have educated in west and know that economy of scale is required in farming also as in case of any manfacturing industry.


Dayananda Kamath k

In Reply to Prakash Chhotulal Patel 3 years ago

they are continuing the british legacy. destroy the economy then people will automatically become slaves. they have destroyed the indian economy for their prestige only. public transport was not developed to support maruti. tax laws were drafted to benefit only maruti. and now we are talking about petrol import bill. mgnrega has destroyed the cheap labour the usp of india,and lined the pockets of politicians by wrong implimentation. industries were developed withought power generation. it is clear mismanagement to line their own pockets.

Dayananda Kamath k

3 years ago

if they teach people to catch fish how poiticians can reap harvest every year. since independence our govt has followed a policy of selective benefits to selective people. they have vested interest in keeping people poor.their main issue is some how remain in power let the people and country go to dogs.because the family got the power on platter the toiling of crores of people. we have become slaves of nehru gandhi family from british.they have foloowed the same british policy of devide and rule.

Dr Anantha K Ramdas

3 years ago

dear mr Nimbalkar: After sending my reply, I did some background check and agree with your anxiety.

There is a lot of objection and public reaction to such proposal is actually aimed at feudal landlords and zamindars!

Personally, I think those of you in the same (or similar situation) should join hands and take up the issue through a qualified and honest lawyer or thru a reliable political party leader. You may also, all of yu I mean, jointly make an appeal and petition to the President of India directly or via the Minister Jayaram Ramesh.
Also, when they took away 50 acres from your family, they ought to have given suitable compensation?

Also your lawyer will probably tell you to divide the land amongst all of your family in such a way that the total holding remains same.

I fully agree with you that it is unfair for anyone to snatch away your traditional family land property. You must all put up a joint stand and fight this issue. I will also consult some friends and let you know in due course.

Meantime, good luck and god bless, and do your best to increase productivity and create wealth foryour self and family.


Prakash Chhotulal Patel

In Reply to Dr Anantha K Ramdas 3 years ago

No compensation is given in Land ceiling. As far as your suggestion for division of land among other family members,I must say, nobody will be benefited more than patwaris ( talathis in maharashtra) who will demand hefty sums of money for splitting the owership of land.


3 years ago

Thank you dr. Ramdas.
I have read the draft and there is a suggestion given to the states to revisit their existing ceiling acts and reduce the permissible land holdings from the existing limits to 5 to 10 acres of cultivable land and 10 to 15 acres of dry land.

Now we have 2 holdings. One of my parents and the other of us three. Hence we will be able to hold only 2 units multiply by 10 avers each which comes to 20 acres. Rest of the land we will have to surrender.

The same thing had happened in the previous two ceilings.

Kindly correct me if I am wrong.


D. R. Nimbalkar.

Dr Anantha K Ramdas

3 years ago

dear mr nimbalkar: Thanks for your comments. Actually, the article covers what the government wants to do with the excess land they have and which they want to give it away to the landless farmers.

To the best of my knowledge, I do not think the government plans to take away your land or anybodyelse's.

In fact, please let me know what crops you are cultivating and whether you are getting any help in your agriculture from any government department. Are you getting subsidized fertilizers?

Indeed, I am pleased, and so will be many other readers, that your educating your son, looking after your parents and taking care of the land. Hope you are also making compost so as to produce quality farm products.

I will write to you again and am glad you responded. Hope you and your wife are spending time to learn about cultivation of organic vegetables/fruits etc as these will also give you extra income.

good luck, god bless and Jai Hind


Prakash Chhotulal Patel

In Reply to Dr Anantha K Ramdas 3 years ago

There is very informative article in marathi newspaper SAKAL dated 17th August 13 by Ms.Mrinalini Nanivadekar on this subject of land ceiling.


3 years ago

I am a 38 year old farmer from asu, tal. Phaltan, dist: satara, maharashtra.
We are totally 5 of us in the family, my parents both r in their late
60's, my wife, myself and our son who is 9.

I read your land reform draft yesterday and am particularly disturbed
about the ceiling clause in it.

When my parents got married their land holding was 100 acers. In the
first two ceilings they lost 50 acres and their holdings came down to
50 acres.
This 50 acres is all that we have.
From the income of this my parents educated their 3 children, got 2
daughters married and were able to live a dignified life.

Now they are old and cannot work.
Now we I.e. My wife and myself look after the farm and try to live our life.

Our present income from 50 acres after taking 2 crops per year is
about 10 lacs per year. We are happy in it. In fact we would like to
expand our farm, get new machines and make it more profitable but we
cannot do it because of the land ceiling act.

We r also building a house for which we have taken a loan of 30 lacs
from the bank.

Now if your new land ceiling act comes into effect then our land
holding will come down to 20 acres.
From this we will be able to earn about 2 lacs per year which comes to
17000 per month.
Our monthly expense is 7000
Sons school fee per month is 7000. We have to keep him in a boarding.
Hence total  outgoing is rs 14000.
Remaining is 3000.
Home loan emi is 25000.
Hence monthly loss will be 22000.

According to the above calculations I will not be able to pay the emis
of the bank and will default.
The bank in some time will attach my house and land and we will be land less.

We will have to migrate to the cities and look for some small jobs or
beg on the streets.

You might collect our land and give it to the land less but you will
make us land less in their place.

According to my knowledge a country progresses when the people progress.
I know only farming, I think I  am good in it. I would like to expand
in it but I can't because of this law.
If a person has a right to expand his business to gain prosperity why
can't I have the same?

Can u ever make a law limiting the salary of people or can u make a
law to confiscate factories of industrialists  in the name of poverty
eradication. Why are they allowed expand but we are not. If they
provide employment so do we. At present we employ 10 ladies and 3
gents everyday.

I request you to visit our village.
There are people who have got land from the last ceiling act. Come and
meet them and see their state. It is the same. In fact some have sold
their awarded land and are worse now.

If my parents would have had the original 100 acres they would have
produced double than what they produced in 50 acres and that to for 40
years. Our country would have been self sufficient in food, inflation
would also be low.

Sir this law has done more harm to our great nation then good, kindly
do not repeat the same mistake, but compounded many times, by reducing
the land holding.

Please don't make us land less.


D. R. Nimbalkar
Bhavani farms
Asu, tal : phaltan
Dist : satara


sreeram boppana

In Reply to Ranjit 3 years ago

I am so upset about this mindless act to distribute land to landless.

First of all so far they didn't improve life of any small or marginal farmer in that case what are they trying to achieve by distributing a acre of land to any one ?

On one hand you support capitalism helping one or two individuals amassing lakhs of crores but you cant let a farmer build his farm to a sustainable level.

I am a software engineer working in USA , and my dream was to get back to india and start farming. Current 50 acre land limit itself is so small when compared to any developed country farm size. Now if you divide it further how do they propose to improve the living standard of these small farmers.

by Continuing to keep small farmers their agenda is to drive the corporates into farmsector without any major capital.

If you look at this bill along with the corporatization proposals diff state governments are bringing their ulterior motive is to divide bigger land holding to smaller and then prove that farming is nonviable on small scale , then they can bring corporates to help farmers by taking the lands on lease.

All these politicians eat away all the subsidies of farm sector ,which are in different forms like fertiliser, seeds, pesticides minimum support prices all these are money making avenues will be well established for politicians.

On one hand they are bringing FDI into retail sectors , who deals only with big farmers or big groups of producers. Thus all the individual small farmers will become so vulnerable at the mercy of the corporates.WHo has to sell at the prices dictated by Corporates. Then Corporates can get huge profits.

Already Congress has screwed the sustainability of the country by killing the farmer and farming . Gandhi's dream of stronger self sustainability of village has been killed by weakening the panchayati raj system .

All the political parties are selfish for power , Every one wants votes Congress, BJP ,CPI,CPM one and all are in the same boat.

All these khadi wearing swiss bank holders are looting happiness and future of India


Dayananda Kamath k

In Reply to sreeram boppana 3 years ago

as long as indian people are hungry for free lunch these types of laws will be brought.they have vested inerest in keeping the people poor. and country also poor.

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