Nifty is headed for 5,350 and below, unless the Reserve Bank of India springs a surprise at its policy review meeting on Thursday
The Reserve Bank of India's (RBI) possible move to cap rising inflation with a 25 basis point rate hike pulled the market lower today.
The market opened lower, as nervousness took centre-stage ahead of the RBI's policy review, due tomorrow. The Sensex started the day 10 points lower at 18,299 and the Nifty opened at 5,494, seven points down from its previous close. Selling was seen in realty, banking, consumer durables and IT stocks, in early trade.
The market was range-bound till mid-morning, after which buying in select stocks lifted it marginally, although the key indices were still negative. The market touched the day's high with the Sensex at 18,309 and the Nifty at 5,499. However, across-the-board selling and key European indices trading in the red, pulled the domestic indices southwards in post-noon trade.
The market fell to its intra-day low in the last hour, with the Sensex losing 198 points to 18,111 and the Nifty at 5,439, down 62 points. The benchmarks managed a close above those levels, the Sensex ended at 18,132 a fall of 176 points and the Nifty settled at 5,448, a loss of 53 points.
The Nifty traded below yesterday's closing throughout the session and ended at a 14-day closing low. The Nifty has hit a lower intra-day low and closed below the first support of 5,450. The downtrend will be confirmed if the Nifty hits a lower low and lower close below 5,415. After that it could quickly fall to 5,350 and below. What can reverse the decline is a surprise move by the RBI not to tighten rates.
The advance-decline ratio on the National Stock Exchange was 475:917.
Among the broader indices, the BSE Mid-cap index declined 0.55% and the BSE Small-cap index fell by 0.59%.
In the sectoral space, BSE Bankex (down 1.58%), BSE Realty (down 1.34%), BSE IT (down 1.25%), BSE Power (down 1.10%) and BSE Consumer Durables (down 1.09%) were the top losers. BSE Fast Moving Consumer Goods (up 0.14%) and BSE Healthcare (up 0.02%) were the only sectoral gainers.
DLF (down 2.80%), Wipro (down 2.78%), State Bank of India (down 2.33%), ICICI Bank (down 2.10%) and Jaiprakash Associates (down 2.02%) ended at the bottom of the Sensex list. Reliance Infrastructure (up 1.46%), Tata Motors (up 0.96%), Hindustan Unilever (up 0.52%), Hero Honda (up 0.20%) and ITC (up 0.13%) were the top performers on the benchmark.
Rain Commodities had announced a sub-division of one equity share of Rs10 each into five equity shares of Rs2 each on 12th May. The record date has been fixed on 16 June 2011. The stock was down 8.17% on the NSE today.
Markets in Asia settled mixed as the Chinese central bank's rate tightening on Tuesday resulted in the Shanghai Composite settling in the red. While stocks in Seoul ended higher, the South Korean central bank said it is open to more rate hikes as prices remain higher. The continuation of the debt crisis in Europe also weighed on investors.
The Jakarta Composite gained 0.56%, the KLSE Composite rose 0.50%, the Nikkei Composite was up 0.28%, the Seoul Composite climbed 0.47% and the Taiwan Weighted added 0.03%. On the other hand, the Shanghai Composite tanked 0.90%, the Hang Seng declined 0.68% and the Straits Times shed 0.08%.
Back home, foreign institutional investors were net sellers of stocks worth Rs798.53 crore on Tuesday. On the other hand, domestic institutional investors were net buyers of shares worth Rs610.72 crore.
The home ministry has given unconditional approval to Reliance Industries (RIL) for the sale of a 30% stake in 23 oil and gas properties, including the Mukesh Ambani-led company's showpiece KG-D6 block, to UK's BP Plc for $7.2 billion. RIL brought in BP to leverage Europe's second biggest firm's expertise in producing oil and gas from deep-sea areas.
RIL has been facing sub-surface technical problems at its eastern offshore KG-D6 fields, where production has fallen from 61.5 million metric standard cubic metres per day (mmscmd) to about 48 mmscmd, far below the targeted 69 mmscmd. The stock fell 1.40% to Rs900.75 per share on the Bombay Stock Exchange (BSE) today.
Following the Supreme Court asking the Central Bureau of Investigation to explain the whereabouts of the Rs200 crore bribe that was allegedly routed to Sun TV in the telecom spectrum allocation scam, CBI sources said they would write to the Enforcement Directorate (ED) to initiate the process to attach the property or equity shares worth Rs200 crore of DB Realty. The DB Realty stock fell 0.67% to Rs74.15 on the BSE.
Some 76% of Indian respondents say that they have a financial plan in place, according to a recent global study done by HSBC Bank. But are Indians really financially prepared to handle their finances after retirement?
In a recent global survey by HSBC Bank called 'The Future of Retirement', 76% of the Indians surveyed said that they have a financial plan in place. However, despite this majority saying that they have a plan in place, there seems to be a glaring contradiction-51% of the respondents were worried about being able to cope financially in their old age and 10% felt that they would need to work in their life after retirement to be able to finance themselves. Indian respondents may have a financial plan in place, but their plan not being good enough is causing them to worry.
The 1,028 respondents from India were mostly between 30 years to 60 years, living in urban areas and having a decent education. For a country where just 30% of the population are from urban areas, the sample size of the survey may not adequately represent the views of the entire country-but the figures are still a cause for concern. If the sample size was larger, considering all income groups, the picture would have been more worrying.
As per the report, "A key challenge in encouraging households to start planning remains the need to raise basic levels of financial literacy. The level of awareness is low and some don't even know how to find a good advisor."
Though Indians are positive in their approach towards financial planning, there seems to be a lack of proper guidance. There maybe over 20,000 independent financial advisors (not including bankers and the mass of insurance agents). How many of them are trained and qualified to sell financial products?
Financial products are being sold as consumer goods. Consumer products are standardised, while financial products are not. The way they are being sold is equally important. Each person is different, with different kinds of plans and objectives and a different set of financial product to suit his/her needs. Most agents just push whichever product earns them a higher commission.
Apart from this, there have been numerous counts of mis-selling.
The Certified Financial Planner (CFP) is a certification which is administered globally by the Financial Planning Standard Board (FPSB) and by Certified Financial Boards of Standards in the US and its territories. India became a CFP council member in 2001. But till 2010, there are just 1,285 CFP professionals in India. The US has the highest with 61,951 CFPs. China and Japan have 9,034 and 17,109 professional planners respectively. China, which has a population close to ours, became a council member much later in 2006 and has seven times more financial planners than India.
Retirement planning is essential. Many fail to plan for the 30-35 odd years of retirement, now that longevity is increasing. The key to making your financial savings outlive you is to make wise investment decisions. Most people are starved for time and need quick and to-the point investment advice. But, how reliable this advice is, is a cause for concern.
The government has already constituted a committee headed by CBDT chairman Prakash Chandra to devise new strategies to deal with the issue. The committee is expected to submit its recommendations in the next six months
New Delhi: The government on Wednesday created an email id for public to send their ideas and inputs to tackle issues arising out of black money, reports PTI.
The email—[email protected]—has been created on the server of the National Informatics Centre and the public can send their responses on the subject with immediate effect, a senior finance ministry officer said.
“General public can send in their responses and inputs like imposing penalties and making penal provisions to tackle with the issue,” the officer said.
The government has already constituted a committee headed by Central Board of Direct Taxes (CBDT) chairman Prakash Chandra to devise new strategies to deal with the issue. The committee is expected to submit its recommendations in the next six months.
The email account will be continuously monitored by finance ministry officials and they would place the messages before the committee headed by the CBDT chairman.