Sensex, Nifty to remain range-bound: Weekly Market Report

The index is likely to remain in the 7,445-7,650 range for some more time.

The S&P BSE 30-share Sensex closed the week that ended on 27th June at 25,100 (down 6 points or 0.02%), while the NSE’s 50-share Nifty closed at 7,509 (down 3 points or 0.04%) for the week. We had mentioned in our previous week’s report that the Nifty has to hold above 7,470 for it to make efforts to move up.

On Monday, the index hit a low below 7,470, but managed to rise above this crucial mark again. News of the upcoming budget affected market sentiment. Nifty closed at 7,493 (down 18 points or 0.24%). A hike in the rail passenger fare and freight rates increased the worries of a further rise in inflation. The government will raise its import duty on sugar to 40% from 15%, as the government tries to revive business at mills that owe farmers around Rs11,000 crore, food minister Ram Vilas Paswan said on Monday.

As anticipated, on Monday the indices moved higher, breaking four days of negative move on Tuesday. Nifty closed at 7,580 (up 87 points or 1.16%). There are reports that the government may soon finalise a hike in natural gas prices and that the price hike will be lower than what was suggested according to the formula adopted by the previous UPA government, which recommended doubling the price.

Pessimism on the bourses again set in on Wednesday. Nifty closed at 7,569 (down 11 points or 0.14%). Reserve Bank of India on Tuesday allowed banks to engage non-deposit-taking non-banking finance companies as banking correspondents for financial inclusion.
The sentiments on the bourses were further affected after Cabinet Committee on Economic Affairs deferred a decision on the revision of natural gas prices by three months. Nifty closed at 7,493 (down 76 points or 1.00%).

Nifty continued moving lower on Friday as well. Nifty closed at 7,509 (up 16 points or 0.21%). Oil prices dropped as militant violence in Iraq has not yet affected oil production from the country.  Power & Coal Minister Piyush Goyal said there were anomalies in the proposed formula which needed to be fixed before revising rates.

For the week, among the other indices on the NSE, the top two performers were Pharma (4%) and Smallcap (3%), while the worst two performers were FMCG (3%) and Energy (1%).

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

ML Top sector


ML Worst sector








Telecom Services




Oil & Gas




Consumer Products




Software & IT Services




Sensex, Nifty may put in a short rally – Friday closing report
Nifty like to make a short upmove if 7,480 level holds. 

As we mentioned yesterday, A further short decline on the indices was imminent, today the indices opened higher and started moving lower after a range bound session upto 11.00 am. After moving into the red, where the indices hit its day’s low, the indices tried recovering, however could only manage closing marginally higher.
Sensex opened at 25,132 and immediately hit the day’s high at 25,210, while Nifty which opened at 7,514 hit the day's high at 7,539. For a little while, when the indices were trading in the red, the Sensex hit a low at 25,033 and the Nifty at 7,482. Sensex closed at 25,100 (up 37 points or 0.15%) while Nifty closed at 7,509 (up 16 points or 0.21%). The NSE recorded a volume of 96.51 crore shares. India VIX fell 0.42% to close at 17.6275.
The Reserve Bank of India on Thursday released the Financial Stability Report (FSR), June 2014, the ninth issue of the half-yearly publication. The FSR reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council, on risks to financial stability. The latest issue is being brought out at a time when global financial markets are showing signs of improved stability, although growth is still not on strong ground and easy monetary policy continues in many economies. On the domestic front, the return to political stability has improved the outlook and the capital markets reflect the expectations on policy measures to address the adverse growth-inflation dynamics and saving-investment balance as also efficient implementation of policies and programmes.
Oil prices dropped as militant violence in Iraq has not yet affected oil production from the country. As crude prices dropped, concerns arising from the impact of high crude oil prices on India's macroeconomic situation eased. India imports about 80% of its crude oil requirements.
On the much awaited clarity regarding the issue of price the natural gas, the Power & Coal Minister, Piyush Goyal said, there were anomalies in the proposed formula which needed to be fixed before revising rates. Among other things he also mentioned that the gas prices in India cannot be fixed based on a formula that includes Japanese imports.
TCS (3.85%), which was among the top two gainers in the Sensex 30 pack, has recently entered into a five-year contract to develop and modernize mainframe applications of, and service the Dutch insurance firm, REAAL N.V's 'life insurance' portfolio.
CRISIL has downgraded Hindalco Industries' long-term debt rating to 'AA/Stable' from 'AA+/Stable'. Slow growth of volumes at its greenfield projects, lower margins on weak aluminium prices and intense competition facing its US subsidiary Novelis, was the reasoning for the downgrade. Hindalco (2.63%) was the top loser among the Sensex 30 stocks.
Havells India (6.57%), top gainer in the ‘A’ group on the BSE, will hold a meeting of the board of directors of the company on 30 June 2014, to consider and approve the sub-division of the nominal value of equity shares of the company.
Indian Hotels Company (4.83%), top loser in the ‘A’ group on the BSE, was recently in the news stating that it will issue nine compulsorily convertible debentures (CCD) for every 40 equity shares, to raise up to Rs 1,000 crore. The CCDs will be converted into equity shares after 18 months from the date of allotment. No interest shall be paid and no redemption will be allowed on the unsecured CCDs.
US indices closed in the negative on Thursday.
Consumer spending, which accounts for about 70% of the economy, climbed 0.2% in May after narely changing in April, US Commerce Department figures showed.
Except for Hang Seng (0.10%) and NZSE 50 (0.27%) all the other Asian indices closed in the negative. Nikkei 225 (1.39%) was the top loser.
European indices were trading in the green while US Futures were trading in the red.


Effects of Black Money Generated from Education Sector

A lack of vigilance towards how our education system is developing is going to end up causing long term harm to a wide swathe of Indian society.

In the previous article on black money generated through the education sector, we discussed the amounts generated and the wide swathe of educational fields where this practise is prevalent. This trend creates distortions in Indian society and is detrimental to Indian economy. Following are some of the most glaring distortions caused:

1. Tax evasion – The Indian government loses out on tax revenue on these huge sums, and while black money could be as easily found in many other parts of the Indian economy, this is one black money generating machine that has the most wide-ranging effects on our future generations.

2. Money mopped from various regular individuals concentrates in a few hands. The desparation among the regular middle class people to get the best education for their children means that they are willing to shell out huge chunks from their legitimate savings to get seats in various colleges.

3. The money is either parked in real estate or stashed abroad. If parked in real estate, this supports the artificially hiked real estate prices and creates another loop that feeds inflation and price distortion.

4. If stashed abroad, the money goes out of the Indian economy to support economies in tax havens.

5. Students have come to consider this as an investment and look to recover it as soon as possible. This ends up promoting unethical practises in all related fields. For example, the medical profession has become un-regulated un-accountable mafia, where most of the doctors involve themselves in unethical practices to recover their so-called investment.

6. When the student has paid money, he treats the degree as an entitlement and not something to be earned. This effects the quality of the students input and the graduates that we educate.

7. It is speculated that some of this money is deployed in stock market and commodities exchange market. The commodities exchange has been responsible for commodities inflation especially of food grain. The money is also used for hoarding of commodities, thus give raise to inflation. All this is possible only with tacit political support.

8. This money is about 73.5% of gross budgetary support to Ministry of HRD, Govt of India. If only one years collection is used for primary education and Ekal Vidyalayas (one teacher schools, a successful experiment in over 40,000 tribal villages by Vanvasi Vikas Kendra and Van Bandhu Parishad), primary schools with better facilities can be opened in all villages in India.

Challenge before Current Government

1. HRD Ministry – How to stop this loot? Make policies and channelize energies to improve education infrastructure, better teaching and quality education?

2. Health Ministry – How to break this eco-system from capitation fee till doctor’s loot mafia and provide better medical facilities to masses.

3. Finance Ministry – If nothing can be done by HRD and/or health ministry, at least make this loot official and collect tax on it. At a corporate rate of 33%, the tax will be about Rs. 16,000 crores per year. Then use it for educational purposes.

4. Prime Minister – This is a big challenge before Mr Modi. If he can tackle this menace, he can control many distortions in the society and economy.

We often find our academicians, politicians and economists waxing eloquent about India's demographic dividend. With the kind of higher education culture we have fostered in India, the dividend will soon become a curse. It is high time that the government took a hard look at how higher education is being monetised in India.

You may also want to read...

Education sector's link to black money




Anil Agashe

3 years ago

Most politicians in Maharashtra have their own Trusts running educational institutes. One thing that needs to be done is for all colleges teaching professional courses the tax exemption must be revoked. Why should educational institutes that make profits have zero tax status?


3 years ago

In the most literate state of India, Kerala, there are too many educational institution have come up over the last decade. Most to these institutions are given special status under the guise of "minority institutions" by the Government.

Are all these institutions really "minority institutions" ? There needs to be an inquiry.

Gopalakrishnan T V

3 years ago

If there is a will there is a way,The whole world except perhaps our Income tax Department knows how black money is generated by the so called educational Institutions in the Country. Banks are also victims of this loot in a way. They sanction a good lot of educational loans and other loans to many which turn bad and this becomes a black money in the hands of these educational institutions.The generation of black money has been going on for decades with the blessings and support of politicians, banks, bureaucrats, educationists and wealthy section of the masses. Every state is indulged in these activities. The new Government decides to fix,the Government can find enough of resources to provide very good education, to fund infrastructure development and reduce the tax burden of middle and lower middle classes. The Charitable trusts are another area where conversion of black money into white and genertion of black money take place. Happy that after the new Government takes over,some true positions and revelations are coming out and if the Government really is serious resources for all its developmental activities can be easily found.Bringing in some order and ethics in the society would be a value addition and bonus. The authors have done an excellent job worth commenting.


Suiketu Shah

In Reply to Gopalakrishnan T V 3 years ago

Perfectly said that "charity orgainsation" are bredding ground to convert black into white.Lot of "failures in life senior citizens' in south mumbai claim they are doing work for charity to "give back something for the society"(in their own words) but the reality is they are doing this as they are unable to earn a living.This is a major reason lot of people have little int in charity organicasations as its an open secret main office bearers take the money home.


3 years ago

Student’s educational fee and Teacher’s salary must be paid only through Banks

I personally know that in a prominent school, teachers are paid only paltry sum but they are forced to sign on blank registers on receipt of salary.

The Govt. is making it compulsory to open a bank account for citizens to receive subsidies directly. Why can’t the Govt. make it mandatory for educational institutions to pay salaries though a bank?

From Nursery schools to higher educational institutions, especially in urban areas, the Govt. must make it mandatory that the tuition fee of students also must be paid only through banks.



In Reply to MOHAN 3 years ago

the tuition fee of students should be accepted only through banks.

R Chandra Mohan

3 years ago

I don't understand why these private educational institutions are not taxed. Even when the hard working citizen is taxed on his meagre income at source why not the private/corporate schools, colleges and universities. As a person involved with private educational institutions I know how people just start the education business without any morals or ethics. Maybe its time to check all this and bring some relief to the people of India.

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