Sensex, Nifty uptrend broken: Wednesday closing report

If the Nifty manages to close above 6020, the uptrend may resume but looks like a downtrend has started

Sensex and the Nifty opened lower at 20,200 and 6,032. Yesterday we had mentioned that for the current up move to end, the Nifty should close below 6020. Today the index closed much below this level after hitting a five day low (including today). The NSE saw a volume of 56.02 crore shares, much higher than yesterday.


Late on Tuesday, the RBI took new steps to support the rupee to boost the local currency by tightening liquidity. The RBI lowered the overall limit for borrowing under the daily liquidity adjustment facility for each bank to 0.5% of deposits from 1%. The central bank also said banks now needed to maintain 99% of their daily cash reserve ratio requirements -- the deposits they must set aside -- with the RBI, compared with 70% now. The change takes effect from the two-weekly period starting July 27.


The indices tried to rise after the initial lows but quickly slipped within an hour to hit their respective lows after which they traded almost at the same level until making some recovery at the close of the session. The Sensex hit the high of 20,253 and 6,047 respectively. The lows hit were 19,994 and 5,963. Both the Sensex and the Nifty recorded their highest percentage loss after 3rd July 2013. The Sensex closed at 20,091 (fell 211 points, 1.04%) and the Nifty closed 5,991 (fell 87 points, 1.44%).


The broader indices too settled lower. The BSE Mid-cap index fell 1.82% and the BSE Small-cap index fell 1.42%.


BSE IT (up 1.03%) and BSE TECk (up 0.99%) were the only sectoral gainers while BSE Bankex (down 4.61%); BSE Consumer durables (down 3.13%); BSE Capital goods (down 2.98%); BSE Metal (down 2.09%) and BSE PSU (down 1.76%).


Out of the 30 stocks on the Sensex, 9 stocks settled higher. The main gainers were Bharti Airtel (up 2.18%); Wipro (up 2.02%); TCS (up 1.87%); Sun Pharma

(up 1.85%) and Cipla (up 1.68%). The main losers were Jindal Steel (down 3.99%); L&T (down 3.93%); ICICI Bank (down 3.73%); HDFC Bank (down 3.40%) and SBI (down 3.13%).


The top two A Group gainers on the BSE were—Idea Cellular (up 3.58%) and Dabur (up 2.40%).


The top two A Group losers on the BSE were—Wockhardt (down 20%) and Yes Bank (down 12.63%).


The top two B Group gainers on the BSE were—Modern Dairies (up 19.98%) and Patel Integrated Logistic (up 19.31%).


The top two B Group losers on the BSE were—Omnitech Info (down 19.96%) and Cerebra Integrated Technologies  (down 19.92%).


Of the 50 stocks on the Nifty, 12 ended in the in the green. The major gainers were Bharti Airtel (up 2.08%); TCS (up 1.90%); Sun Pharma (up 1.83%); Cipla (up 1.67%) and Bajaj Auto (up 1.39%). The key losers were IDFC (down 9.02%); IndusInd Bank (down 8.41%); Jaiprakash Associates (down 6.48%); Axis Bank (down 6.29%) and Kotak Bank (down 5.82%).


Asian indices had a mixed performance. Jakarta Composite fell the most 1.03% while the Straits Times gained the most, up 0.65%. US stocks ended mostly lower on Tuesday after a decline in a regional manufacturing gauge prompted concern, but the Dow Jones Industrial Average climbed to a record close.


China's manufacturing weakened further in July, signaling the worst of the nation's slowdown has yet to be reached, according to a preliminary survey of purchasing managers. The reading of 47.7 for an index released today by HSBC Holdings Plc and Markit Economics, was less than estimated and if confirmed in the final report Aug. 1, it would be the lowest in 11 months. Readings below 50 indicate contraction.


The signs of euro zone recovery contrasted with weaker Chinese PMI data. German and French PMI surveys both beat expectations. Overall, the business polls indicated that the euro zone economy was likely to grow in the current quarter. The European indices all traded in the green and the US Futures were also trading in the positive.


Tech Mahindra has signed an agreement with UBS Fund Services (Luxembourg) (UBS FSL) as the first client for its new platform, Tech Mahindra Managed Data Services (MDS).The said contract is for an initial five-year term. However, the company has not disclosed the financial details of the contract. Under the agreement Tech Mahindra will provide UBS FSL with a fully managed service across four major areas of data management, namely securities reference data, pricing, corporate actions and tax data. Tech Mahindra rose 2.53% to close at Rs1,209 on the NSE.


Yes Bank shares down 12.6% despite 38% higher net profit in June quarter

Despite reporting 38% higher net profit in first quarter on robust revenues as well as lower bad debts; Yes Bank failed to cheer market as its share fell by over 12% to Rs383.3

Yes Bank saw its first quarter net profit grew 38% to Rs400.84 crore as against the Rs290.14 crore, same period last year. However, this failed to boost the market sentiments and Yes Bank shares fell 12.6% to Rs383.3.

For the first quarter to end-June, Yes Bank’s net revenues increase 31% to Rs2,839.97 crore as against  Rs2174.44 crore in the corresponding period last year. Meanwhile its operating profit grew 48% y-o-y to Rs679.96 crore for the quarter ended 30 June 2013. 

According to Moneylife analysis, the bank’s three-quarter average revenue growth rate stood at 30% while its revenues for the June 2013 quarter grew at 31%. The average operating profit growth rate for the last three quarters stood at 46% while the lender posted a 48% increase during the June quarter. The Bank despite the good showing, is quoting at a discount of sorts. Its market capitalisation is just 5.62 times its operating profit while the return on net worth stood at 24%.

The bank’s total advances grew 24.3% to Rs47,897 crore as at June 2013 when compared to the Rs38,533 crore recorded in the same period last year. Current and savings account (CASA) deposits grew 61.1% to Rs13,163.2 crore taking CASA ratio to 20.2%, up from 16.3% for the same period last year.

Total deposits of Yes Bank grew 29.9% to Rs65,244.8 crore for the quarter ended 30 June 2013 as against Rs50,208 crore recorded for the same period last year. The bank’s balance sheet stood at Rs100,802 crore, up 29.9% y-o-y.

The Bank’s tier-1 capital stood at 9.5%while total capital adequacy ratio 15.4%.

The bank’s gross non-performing advances ratio, for the June 2013 quarter, stood at 0.22% when compared to then 0.28% for the June quarter last year. Similarly, net non-performing advances ratio stood at 0.03%, or Rs12.1 crore, for the current quarter when compared to 0.06% for the same period last year.

Corporate and institutional banking accounted for 64.3% of the customer assets portfolio while commercial banking (mid-size) accounted for 18.6% of the portfolio. Retail banking constituted to 17.1% of the customers’ assets.

Commenting on the results and financial performance, Rana Kapoor, managing director and chief executive officer said, “Yes Bank has witnessed steady growth on back of strong net interest income, and continued to focus on revenue diversity leading to a healthy increase in non-interest income. The bank has continued the strong traction on CASA and retail deposits, with its CASA ratio crossing 20% for the first time since inception.”

During the quarter, Yes Bank added 45 branches (total 475 branches), 100 ATMs (total 1051 ATMs).

On Wednesday, Yes Bank closed 12.56% down to Rs383.3 on the BSE, while the benchmark Sensex ended the day 1% down at 20,090.


Reliance Life’s drive against fraud callers – Will it take action against its corporate agent AB Capital?
Reliance Life has embarked upon a pan-India drive to fight against spurious callers, but will it take any action against its corporate agent AB Capital whose employees have fraudulently sold policies with fake offer of “interest free loan” from Reliance Capital? Why is AB Capital not named in the press release? Moneylife has written a series of articles
Reliance Life has started an initiative to curb the menace of spurious callers offering “interest-free loan” to entice customers to buy Reliance Life products. While the initiative is commendable, there have been cases wherein its own corporate agent AB Capital employees have been fraudulently involved in such sales. Ironically, while Reliance Life feels it is a victim of such fraud, the same is the stance taken by AB Capital who wrote to Moneylife stating that “Based on our internal vigilance, we plan to lodge FIRs against the perpetrators and terminate their employment.”
It’s perplexing that the Reliance Life press release is silent about AB Capital. Moneylife Foundation’s Insurance Helpline has solved five cases of life insurance sold with bait of fraudulent “interest-free loan” offered by AB Capital personnel. Reliance Life refund in the five solved cases ranged between Rs20,000 to Rs2 lakh. There are six cases pending of which AB Capital has indicated that refund is in process for five policyholders. Has Reliance Life taken any action against its corporate agent AB Capital for the fraudulent selling? There has been no response from Reliance Life on this question.
The press release has modus operandi of spurious callers stating that the fraudulent agency fills fictitious data and gets a policy issued, earning hefty commissions. How can a fraudulent agency make a sale to earn commissions? The sale can happen only by authorised corporate agents or individual agents. The basic premise that “customers get a call from a person claiming to be an employee or agent of the company” itself is flawed when there is a sale involved. The policy cannot be sold by an agency unrelated to Reliance Life. 
It is time Reliance Life proactively take a look at all the policies sold by AB Capital to help the customers who have been fraudulently sold policies with a fake loan offer. It will give them success in solving the so called spurious sales rather than waiting for policyholders to respond. The answer can be found within its own agency force.
Can Reliance Life adopt a hands-off attitude? If the agent is peddling lies on its own, shouldn’t Reliance Life discontinue its relationship with AB Capital? Will the Insurance Regulatory and Development Authority (IRDA) act quickly to cancel AB Capital’s license before it cheats more people? We will be tracking this story to bring you updates.




3 years ago

i also get a call from a no starting 140 he told me the same & offers me a loan of 1 lakh with zero% interest
the person is MANAV MEHTA & his senior KHUSHI MALHOTRA from AB CAPITAL( the broker name on my policy document) then there agent collect 15000 of cq from me and then khushi malhotra told me that i got 5000 back in my account every time i paid my premium, KHUSHI MALHOTRA send me a message & told me to diposite 2000rs for processing fees in two hours but that time i was nt in town then she told me to recharge her phone as same amount of processing fees and she will diposite it on my behalf in company, now its two & half mnth gone they both r not attending my phone and every time i call from diffrnt no they promise me that all is done by company only transection is balance, nw i relise from ur article that they r really a fraud,
is thr anyone who help me out to take a stricked action against them


3 years ago

today i got a call from 011-30190343 stating that they are from Birla insurance and 10 yr zero interest loan for insurance. I asked them few more question related to IRDA etc. and the person cut off the phone

sunil jivan date

3 years ago

I got a phone call offering me loan at 2.5%. I asked the guy to clarify whether it was per month or per year & he confirmed it was per year. I still thought that he must be a rookie in the call centre so I told him that it cannot be per year. He was not making a mistake because he immediately said that at 2.5% per month it would be 30% per year and No it was indeed 2.5% per year. I told him if that be so I wanted a loan of 1Cr. He wanted to know my profession and my ITR returns. I told him why all that, I will take your 1cr & keep it in post office at 8%. So your money is safe. He said that for such a large loan he would require documents. So I said why don't you keep the money in post office your self i/o of lending it at 2.5%. he said his company is intretsed in expanding customer base.

To cut the story short; though upfront the offer looks to be too attractive, we have to remember that there is no free lunch. It is either connected with some Insurance plan that ultimately they may want to palm off or it is a Nigerian fraud scheme where they will ask me to deposit a few Ls or Ks in a bank account for processing the loan and then vanish with it. Beware you too may get such calls which are apparently too good to be true & believe they are just that.



In Reply to sunil jivan date 3 years ago

good point

Ramkumar agrawal

3 years ago

Actually Reliance life is the biggest culprit in selling of policy from Call centre. They call in the name of IRDA claiming that they can make benefit to client by releasing their unclaim bonus. I have complete record of their conversation in my recorded line. Including their name and mobile number. For claiming unclaim bonus they ask client to take two policy from reliance and the unclaim bonus will be deposited in these new policy.



In Reply to Ramkumar agrawal 3 years ago

yes, giving unclaimed bonus is another approach for mis-selling.

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