Sensex, Nifty may suffer a short decline: Monday closing report

A move above Monday’s high may mean a resumption of Nifty uptrend

After trading in the green for a few minutes, the market was drawn into the negative zone where it traded for the entire session on Monday. On Friday, we had mentioned that the climate favours the bulls and that the Nifty may drift higher subject to short dips.


The Sensex and Nifty opened the week with a high opening gap of 67 points and 23 points at 21,260 and 6,336, respectively. Soon after hitting the days high at 21,305 and 6,344, the indices plunged into the red. At the end of the session the indices hit its respective low at 21,089 and 6,273. From the days low the benchmark mad a quick recovery but ended in the negative. The Sensex closed at 21,143 (down 51 points or 0.24%) while the Nifty closed at 6,291 (down 23 points or 0.36%). The NSE recorded a volume of 53.01 crore shares.


Among the other indices on the NSE, the only gainers were Metal (0.65%); MNC (0.33%); FMCG (0.26%); Media (0.26%) and Energy (0.08%). The top five losers were Realty (1.66%); IT (0.83%); PSU Bank (0.83%); Bank Nifty (0.73%) and Auto (0.57%).


Of the 50 stocks on the Nifty, 18 ended in the green. The top five gainers were Bhel (4.13%); Coal India (2.72%); H D F C (1.22%); Reliance Industries (0.76%) and Hindustan Unilever (0.75%). The bottom five losers were DLF (3.38%); ACC (2.56%); Ranbaxy (2.42%); Jaiprakash Associates (2.32%) and UltraTech Cement (2.23%).


Of the 1,224 companies on the NSE, 570 companies closed in the green, 610 closed in the negative while 44 closed flat.


As the general elections draw closer, RBI governor Raghuram Rajan said in his foreword to the eighth edition of the RBI's Financial Stability Report 2013 (FSR), warned that any political instability after May 2014, post-results, will drag the beleaguered economy further down, and that a stable new government would be desirable.


Investor sentiment was hit adversely after the RBI's latest FSR said that the risks to the Indian banking sector have further increased since the publication of the previous FSR in June this year.


RBI is also concerned about the asset quality of banks. But the report also adds that under improved conditions, the present trend in credit quality may reverse during the second half of 2014-15. Gross non-performing assets (NPA) ratio is expected to rise initially to around 4.6% by September 2014 from 4.2% as at end September 2013, which may subsequently improve to 4.4% by March 2015.


According to the results of RBI's systemic risk survey during October, global risks and domestic macro-economic risks were perceived to be the two most important factors affecting the stability of Indian financial system.


US indices closed marginally in the negative on Friday. Market now awaits the November report on pending US home sales.


Except for Shanghai Composite (down 0.18%) all the other Asian indices closed in the positive. Jakarta Composite     was the top gainer which rose 1.45%.


Chinese President Xi Jinping will head a group steer economic and social reforms, the official Xinhua news agency said on Monday, underscoring his determination to push through change amid fears of resistance from vested interests.


European indices were trading marginally in the negative while the US Futures were trading marginally in the green.


Welspun Corp to exit from Leighton Welspun India

Welspun Corp is selling its entire 39.88% stake in Leighton Welspun Contractors India Pvt Ltd for $99 million and would the money to reduce its debt

Welspun Corp Ltd (WCL) said its unit Welspun Infra Projects Pvt Ltd will sell its entire 39.88% stake in Leighton Welspun Contractors India Pvt Ltd for $99 million.

In a regulatory filing, Welspun said it would use the proceedings from the sale to deleverage its balance sheet.

Welspun is already in advanced stages of demerging the parts of its business other than line pipes into Welspun Enterprises Ltd through a court process.

Welspun closed Monday 10% higher at Rs64.4 on the BSE, while the 30-share Sensex ended marginally down at 21,143.


Financial inclusion gains momentum in India: CRISIL

India’s overall CRISIL Inclusix score has risen by 2.7 in fiscal 2012 – the highest annual increase since 2009, says Roopa Kudva, MD & CEO, CRISIL

CRISIL today released the latest scores for CRISIL Inclusix, its financial inclusion index, based on the latest data (as on 31 March 2012) provided by the Reserve Bank of India (RBI). The index measures financial inclusion up to the level of each of the 638 districts in India.


According to Roopa Kudva, managing director & CEO, CRISIL, “India’s overall CRISIL Inclusix score has risen by 2.7 in fiscal 2012 – the highest annual increase since 2009. As many as 587 out of a total 638 districts in India and 34 out of 35 states and Union territories improved their scores, reflecting a broad-based improvement in financial inclusion.”


The trends observed by analysing the latest RBI data shows:

(a) A significant rise in new savings accounts across the 5 regions – north, south, east, west and north-east. Overall, 79 million new savings accounts were opened in fiscal 2012, 12.6% more than in fiscal 2011.

(b) Agricultural credit accounts have grown at 11.1%, which is the most since fiscal 2009.

(c) The number of bank branches in the bottom 100 districts has increased by 6%, faster than the all-India growth of 5.6%.


Other inferences include: Just one in two Indians have a savings account and one in seven has access to bank credit. There are wide disparities in access to financial services, too. While India’s six largest cities have 10% of India’s bank branches, the bottom 50 districts have merely 2% of the bank branches.


“To speed up inclusion, financial services need to flow beyond the south and the large cities. Specifically, policy makers will have to incentivise expansion of banking services in the districts that have low CRISIL Inclusix scores through an increase in branch network and partnerships with other players,” Kudva said.


CRISIL Inclusix is an index to measure the extent of financial inclusion in India across its 638 districts. It claims to use a statistically robust, transparent, and easy-to understand methodology. It is a relative index on a scale of 0 to 100, and combines three critical parameters of basic banking services — branch penetration, deposit penetration, and credit penetration —into one metric.


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