Rise in global markets fails to cheer bourses as weak trends continue in local indices
Indian markets remained weak as the Sensex declined 118 points from Friday’s (4 December 2009) close, ending the day at 16,983, while the Nifty declined 42 points to close at 5,067.
During the day, Reliance Industries (RIL) fell 3% as the company’s bonus shares were admitted into trading effective today, 7 December 2009. The company had issued one fully-paid bonus equity share for every existing fully-paid equity share of Rs10 each.
Tata Steel on Friday announced a partial closure of Corus’ Teesside Cast Product (TCP) plant in north England, after four companies stopped buying metal from it. As per reports, the company said that operations will be suspended at the end of January 2010 forcing the loss of 1,700 jobs—around 600 fewer than envisaged earlier. The stock was down 3%.
Speciality Papers plunged 9%, after the company’s board decided to call off its stock-split plan.
United Breweries Ltd has entered into a new Shareholders’ Agreement with Heineken NV to penetrate the Indian beer market. Heineken will be active in India solely through UB. The alliance will offer consumers a portfolio of national and international brands in India. The stock was up 5%.
Adhunik Metaliks shot up 7% after the company received final approval from the ministry of environment & forests, Government of India, for diversion of forest land in villages Deojhar, Kulum and Mahadebnas in Keonjhar district of Orissa for mining of iron ore out of its captive mine.
EdServ SoftSystems rose 5% on reports that the company plans to raise $25 million through a GDR/FCCB issue, which is expected to be completed by the first quarter of next year.
During trading hours, finance minister Pranab Mukherjee said the government has not issued any directive to State-run banks on consolidation and it was up to the banks themselves to decide on mergers.
Meanwhile the initial public offer (IPO) of JSW Energy, a part of Sajjan Jindal-led JSW Group, which will close on 9 December 2009, was oversubscribed shortly after the bidding for the IPO commenced, NSE data showed. The issue was subscribed 1.25 times. The price band for the IPO is Rs100-Rs115.
According to C B Bhave, chairman, Securities and Exchange Board of India (SEBI), overseas fund flows into Indian stock markets are manageable and foreign portfolio investors should be allowed smooth entry and exit to boost equity investments. As per media reports, he also said the authority could only ensure the necessary regulations for such investments had been adhered to.
Reserve Bank of India deputy governor Subir Gokarn said on Saturday that a persistent rise in food prices may raise broader inflationary expectations and the central bank is looking to strike a balance between supporting growth and taming inflationary worries. The exit from an easy monetary policy is a “graded” process and economic growth alone will not determine its pace, he said.
During the day, Asia’s key benchmark indices in China, Japan, South Korea, Singapore and Taiwan rose by between 0.16%-1.63%. However, indices in Hong Kong and Indonesia fell by between 0.77%-1.17%.
As per media reports, a Chinese economic policy-making group said that China will maintain a proactive fiscal policy in 2010, and will maintain a loose monetary policy.
On Friday, 4 December 2009, the Dow Jones Industrial Average gained 23 points while the S&P 500 index rose 6 points and the Nasdaq Composite Index added 21 points. The markets ended higher after reports showed that employers cut fewer jobs than expected in the month of November 2009, showing signs of improvement in the economy.
US employers cut only 11,000 jobs in November 2009, the smallest decline since the recession started in December 2007 whereas the November 2009 unemployment rate also declined to 10% as against 10.2% in the month of October 2009.
However, in premarket trading, the Dow was trading 33 points lower.
— Swapnil Suvarna
In a move to increase retail penetration, the BSE is coming out with a mobile trading platform as well as websites in various regional languages
The Stock Exchange Mumbai (BSE), India’s oldest stock exchange, is planning to launch a trading platform where investors will be able to execute orders over their mobile phones, said Madhu Kannan, Managing director and Chief Executive Officer of BSE. The exchange is awaiting permission from market regulator Securities and Exchange Board of India (SEBI).
Speaking at an award distribution ceremony organised by MoneyLife magazine, Mr Madhu Kannan said, “BSE will be launching a handheld order execution platform with the same amount of risk control and risk management subject to regulatory approvals.”
“People are spending more time on mobile phones these days. India has around 400 million mobile phone users and if we compare that to the (current figure of) 8 million investors, we found that there is a huge potential to leverage this medium,” added Mr Kannan.
In order to further connect with investors across the country, BSE is in the process of launching its website in various regional languages. Currently the BSE website is available in English, Hindi and Gujarati.
“Taking a cue from the banking sector, BSE is planning to set up similar platforms over the next five to six months to penetrate the regional market,” said Mr Kannan.
In order to boost financial literacy among students, the BSE has already tied up with various institutes and colleges to award degrees. Two degree programmes have already been launched this year and the BSE plans to increase the number of programmes, the BSE chief added.
— Ravi Samalad
The market regulator has arrogated so much power that many of its actions go unquestioned