Sensex, Nifty upmove may slow down: Monday closing report

Close below 6,650 on the Nifty may pull it lower

Last week we had mentioned that the market is currently highly overbought. Today the NSE recorded a huge volume of 90.60 crore shares but the index witnessed a weak upmove. Although the market opened and hit its all time high at the beginning of the session the benchmarks soon lost momentum and started heading down until it completely moved into the red where it traded for nearly two hours. In the last few minutes of the session the indices pulled back into the green and closed marginally higher from Friday’s close. 


The Sensex opened at 22,423 while the Nifty opened at 6,723. The benchmarks hit a high of 22,467 and 6,730 from where they went loser to hit a low of 22,254 and 6,662. The Sensex closed at 22,386 (up 46 points or 0.21%) while the Nifty closed at 6,704 (up 8 points or 0.12%).


Among the other indices on the NSE, the top five gainers were Metal (3.75%), Realty (2.86%), Smallcap (1.70%), M N C (1.44%) and Commodities (1.42%). The top five losers were P S E (0.87%); Infra (0.81%); F M C G (0.58%); C P S E (0.45%) and Bank Nifty (0.10%).


Of the 50 stocks on the Nifty, 28 ended in the green. The top five gainers were Hindalco (7.72%), Jindal Steel (4.20%), Tata Steel (3.22%), A C C (2.75%) and Sesa Sterlite (2.68%). The top five losers were O N G C (3.34%), I D F C (2.95%), Dr Reddy (2.65%), Bhel (2.55%) and Tech Mahindra (2.36%).


Of the 1,543 companies on the NSE, 1,024 companies closed in the green, 430 companies closed in the red while 89 companies closed flat.


Market now looks ahead for the RBI First Bi-monthly Monetary Policy Statement, 2014-15 on 1 April 2014.


India's fiscal deficit in the first eleven months of the FY 2013-14 touched Rs 5.99 trillion, or 114.3% of the full year target, government data showed on Monday. The deficit was 97.4% during April-February a year ago. In the interim budget in February, the Congress-led government had revised the full-year fiscal deficit target to Rs 5.25 trillion, or 4.6% of gross domestic product, from Rs 5.42 trillion, or 4.8%, earlier.


RBI on Friday said it will borrow Rs 1.9 lakh crore through issuance of short-term bills in the market in the April-June 2014 quarter.


Tata Steel was among the top five gainers among the BSE 30 stocks. It rose 3.40% to close at Rs393.85 on the BSE. Tata Steel was in news for that it will start production from its greenfield plant at Kalinganagar in Odisha from the last quarter of next fiscal. The Kalinganagar project, which will produce flat products, will have 3 mtpa capacity in the first phase. This would be doubled in the next phase.


Dr Reddy’s Lab was among the top five losers in the pack of Sensex 30 stocks. The stock fell 2.15% to close at Rs 2,560.80 on the BSE. The company plans a fresh foray into the Japanese market. This comes in after last June the company decided to terminate their memorandum of understanding to enter into an exclusive partnership in the generic drugs business for the Japanese market and to establish a joint venture in the island nation in East Asia with Fujifilm Corporation.


Except for Shanghai Composite (down 0.41%), KLSE Composite (down 0.08%) and NZSE 50 (down 0.06%) all the other Asian indices trading today closed in the green. Nikkei 225 (0.90%) was the top gainer.


European indices were trading solidly higher. US Futures were also trading higher.


US indices closed flat with positive bias on Friday. Data from the US showed that household purchases rose the most in three months. Household purchases, which account for almost 70% of the US economy, climbed 0.3% after a 0.2% gain in January that was smaller than previously estimated, Commerce Department figures showed. Federal Reserve Chair Janet Yellen is scheduled to deliver remarks at a conference in Chicago on Monday.


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EAS Sarma seeks immediate action on foreign donations of political parties

Former Union Secretary EAS Sarma who along with others obtained a landmark order from Delhi HC on illegal foreign funding of political parties has called on the Election Commisison to initaite immediate against political parties and Vedanta group

Following a Delhi High Court order that donations to the BJP and Congress from the Vedanta Group prima facie voilated the law, former union secretary EAS Sarma has written to Chief Election Commissioner VS Sampath to initiate immediate action against the parties concerned and to revoke their tax exemptions. Mr Sarma and Association of Democratic Reforms (ADR) had filed a public interest litigation (PIL) in the Delhi High Court (Delhi HC) against foreign funding of political parties.

On 28 March, Delhi HC held that the BJP and Congress had, prima facie, violated the foreign funding law by receiving donations from UK-based Vedanta Resources' subsidiaries and directed the Centre and Election Commission (EC) to take appropriate action against them within six months. As per Foreign Contribution Regulation Act (FCRA) companies like Vedanta come within the purview of the definition of a “foreign company” hence, in pursuance of rules political parties are prohibited from accepting donations from such foreign companies.

EAS Sarma said, “Vedanta has made donations to Congress, BJP and several other political parties like Trinamool Congress. This needs to be investigated urgently and action initiated.”

EAS Sarma has asked Mr VS Sampath to investigate donations received by all political parties from foreign companies during the last several years and proceed against them under FCRA and Representation of the People Act.  He has asked for deterrent action,  in view of the implications of such donations to the security of the nation and the integrity of our democracy.

EAS Sarma has asked to investigate the bona fides of Vedanta's Public and Political Awareness Trust and the electoral trusts set up by the other foreign companies in terms of implicit/explicit violation of FCRA/Representation of the People Act and take urgent action to comply with the letter and spirit of those laws. Sarma further said, “If necessary, bring all electoral trusts set up by foreign companies within the ambit of FCRA by a suitable legislative amendment. The trusts should make a public disclosure of their financial dealings.”

He writes, “Vedanta has also evidently set up a trust known as Public and Political Awareness Trust, specifically for making political donations. This is clearly an indirect way to channel political donations. It is doubtful whether routing political donations through an electoral trust complies with the provisions of FCRA. I understand that several companies have followed this modus operandi. A thorough investigation will reveal the goings on in these trusts which function in a highly non-transparent manner".

EAS Sarma requested chief election commissioner to appreciate the rationale of FCRA/ Representation of the People Act and the legislative intent that underlies it and decide once for all not to appeal against the Delhi High Court judgement. Sarma said, “I believe that the concept of private companies giving donations to political parties is per se objectionable as such donations have vitiated the democratic processes and led to mis-governance on a large scale. In particular, such donations from foreign companies amount to a slap on the face of India's democracy and they compromise the national security.”

The London based Vedanta in its annual report of 2013 clearly mentions that, “in accordance with the normal accepted practice in India of making political donations, the group made political donations of USD2.01 million in 2012 and USD0.97 million in 2013 through a trust or directly in respect of the Indian general election. The board believes that supporting the political process in India will encourage and strengthen the democratic process.”

Vedanta's listed subsidiary firms; Sesa Goa paid Rs30 lakh to the Bharatiya Janata Party (BJP) in 2012-13, while Sterlite Industries gave Rs5 crore to the Public and Political Awareness Trust, set up by the group to make political donations. In August 2013, Vedanta merged both subsidiaries into Sesa Sterlite. Sesa Goa's annual report showed its political donations dropped significantly in 2012-13 to Rs30 lakh from Rs4.65 crore in 2011-12 as its operations were hit by a mining ban.

Sesa Goa has made donations of Rs2 crore to the Congress, Rs1.75 crore to BJP, Rs50 lakh to Maharashtrawadi Gomantak Party, Rs15 Lakh to All India Trinamool Congress, and Rs25 lakh to Nationalist Congress Party (NCP) during 2011-12.Vedanta donated USD5.69 million to political parties in India between 2009-10 and 2011-12. This includes USD3.66 million during 2009-10, when the previous general elections were held. Since listing on the London Stock Exchange in 2003, the company has donated USD8.29 million to Indian political parties.

Also read our earlier stories on political funding by Vedanta group here,

Vedanta’s Millions: Which political party benefited from it?

Vedanta gave ‘illegal’ political donations in India?

Which companies are funding political parties and how legal is it

Vedanta PIL: Centre asked to respond to plea for probe into funding for parties from UK group

Election Commission for probe into Vedanta donations to Congress, BJP

Political parties earned a whopping Rs4,662 crore in seven years


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