Share prices await US stimulus announcement: Wednesday Closing Report

Nifty may struggle between 5,125 and 5,230 before a decisive move

The market closed flat with a negative bias as investors all over the world wait for positive signals from the US Federal Reserve. The NSE traded on a volume of 61.12 crore shares, the second highest in the past six days. Today the Nifty managed a higher high of 5,168 and a low of 5,110, which was the highest in the past 26 days (including today). Although the indicators show signs of a rally, global events may cause impediments in the upmove. The Nifty may move between 5,125 and 5,230 tomorrow.

Continuing from yesterday's positive close, the Indian market opened higher, tracking the Asian markets that were in the green in early trade as investors awaited the outcome of the two-day US Federal Open Market Committee (FOMC) meeting. The Nifty started the day at 5,154, up by a modest 14 points and the Sensex added 30 points to resume trade at 17,129.

Capital goods, consumer durables and PSU stocks supported early gains, which enabled the indices to hit their intraday high in the initial half hour. At the highs, the Nifty rose to 5,168 and the Sensex touched 17,191. However, a high degree of choppiness saw the indices fluctuating on both sides of the neutral line till noon trade.

The lower opening of the key European markets on news that international policymakers would meet in Athens next week to review the measures taken by the Greece government and nervousness ahead of the FOMC announcement, pushed the domestic indices into the negative with the benchmarks falling to the day's low in the noon session. At the lows, the Nifty fell to 5,110 and the Sensex went back to 17,001.

The market was sideways in subsequent trade. It made a feeble recovery attempt in the last half hour, but selling pressure kept the indices in the red till close of trade. The market ended flat with a negative bias. At the end of the session, the Nifty lost seven points at 5,133 and the Sensex settled 34 points down at 17,065.

The advance-decline ratio on the National Stock Exchange (NSE) was 973:689.

Even as the Sensex settled almost flat, the broader indices outperformed the benchmark. The BSE Mid-cap index gained 0.73% and the BSE Small-cap index advanced 0.71%.

The leaders in the sectoral space were BSE Consumer Durables (up 2.04%), BSE Bankex (up 0.96%), BSE Realty (up 0.83%), BSE PSU (up 0.50%) and BSE Power (up 0.43%). The top losers were BSE Oil & Gas (down 1.16%), BSE Auto (down 0.91%), BSE Metal and BSE IT (down 0.26% each) and BSE Fast Moving Consumer Goods (down 0.14%).

The major gainers on the Sensex were ICICI Bank (up 2.15%), Jaiprakash Associates (up 2.14%), Coal India (up 1.57%), Wipro (up 1.30%) and State Bank of India (up 0.89%). The top losers on the index were Hero MotoCorp (down 3.06%), Hindalco Industries (down 2.80%), Maruti Suzuki (down 2.65%), Reliance Industries (down1.57%) and Bajaj Auto (down 1.49%).

The key Nifty gainers were Siemens (up 2.03%), ICICI Bank (up 1.99%), Grasim (up 1.80%), Ambuja Cement (up 1.74%), and JP Associates (up 1.66%). The main losers were Hero MotoCorp (down 3.43%), Hindalco Ind (down 3.27%), Maruti Suzuki (down 3.19%), Cairn India (down 2.55%) and RIL (down 1.97%).

Markets in Asia edged higher on speculation that the US Fed, later today, will announce new measures to boost the economy. A rise in China's economic indicator index in July also supported the gains. However, less-than-expected growth in Japanese exports in August by 2.8% on a year-on-year basis capped the gains on the Nikkei.

The Shanghai Composite jumped 2.66%, the KLSE Composite gained 0.60%, the Nikkei 225 rose 0.23%, the Straits Times advanced 0.39%, the Seoul Composite climbed 0.89% and the Taiwan Weighted was up 0.57%. On the other hand, the Hang Seng lost 1% and the Jakarta Composite declined 1.46%.

Back home, domestic institutional investors were net buyers of stocks worth Rs318.84 crore on Tuesday. On the other hand, domestic institutional investors were net sellers of equities worth Rs317.69 crore.

Power Finance Corporation (PFC) has received the Reserve Bank of India's (RBI) approval to raise $1 billion (Rs4,600 crore) via offshore medium-term note borrowing. The funds would be utilised for funding the power projects, including ultra mega power projects, financed by the company. The stock gained 3.14% to close at Rs164.25 on the NSE.

Belgium-based WABCO Holdings has embarked upon a Rs60 crore investment plan for its Indian operations during the current financial year. WABCO-TVS, which has been renamed WABCO India, will invest around Rs40 crore for expanding its facility at Mahindra World City SEZ in Chennai and another Rs10 crore for setting up a facility at Lucknow. The remaining would be utilised for other purposes. WABCO India added 0.52% to close at Rs1,308 on the NSE.

Sterlite Technologies, engaged in providing transmission solutions for the power and telecom industries, has received a Rs114 crore contract from state-run BSNL for establishment of a broadband network in the state-run company's telecom circles. The company will install and commission the system by the end of FY12-13 and will manage this network for seven years thereafter. The stock jumped 3.88% to settle at Rs41.50 on the NSE.


ONGC may okay Cairn-Vedanta deal on 27th September

ONGC's consent for transfer of control in Cairn India to Vedanta Resources is subject to Cairn Energy subsidiary and the Anil Agarwal-led firm signing a legally binding agreement to share royalty and pay cess on production from their Rajasthan field

New Delhi: State-owned Oil & Natural Gas Corporation (ONGC) may next week give consent for transfer of control in Cairn India to Vedanta Resources, provided the Cairn Energy subsidiary and the Anil Agarwal-led firm sign a legally binding agreement to share royalty and pay cess on production from their Rajasthan field, reports PTI.

The need for a legal document has arisen because Cairn India insisted on ONGC giving no-objection to the Cairn-Vedanta deal before it agrees to accept conditions that the government has set for clearing the $9 billion transaction.

Sources privy to the development said the ONGC board can waive its pre-emption rights only when Cairn India agrees to pay its share of the Rs2,500 per tonne cess on production from the all-important Rajasthan oilfields, as per its stake of 70%, and also makes royalty payments cost-recoverable.

ONGC holds 30% interest in the Rajasthan fields and Cairn previously felt the state-owned firm was liable to pay royalty and cess on its share of production, as well as Cairn's 70% participating interest.

"There is mutual distrust between the two partners," a source said. "Cairn doesn't want to agree to paying royalty and cess without getting a no-objection certificate (NOC) from ONGC, while ONGC doesn't want to give its consent without Cairn agreeing to the conditions set by the government."

A way out of this would be for ONGC, Cairn India, Vedanta and UK's Cairn Energy-which is selling its 40% stake in its Indian unit-to sign a legally binding document agreeing on the government conditions as well as a separate paper granting clearance to the transaction simultaneously.

Sources said ONGC board may on 27th September agree to waive its right of first refusal (ROFR) on the proposal, subject to Cairn India and others signing the legal document.

Upon the board approval, the legal agreement can be signed that very day if Cairn/Vedanta so desire, they said, adding that the NOC will be handed over upon signing of the papers.

SBI Caps, which had been appointed by ONGC to advice on exercising its pre-emption rights, has opined that the Rs355 a share price that Vedanta is paying Cairn Energy for buying a majority stake in Cairn India is too high a price.

Stating that SBI Caps was in the process of finalising its report, sources said the valuation-along with a recommendation for waiver of ONGC's ROFR over the deal-would be put before the state-run oil and gas explorer's board on 27th September.

In a postal ballot earlier this month, 97% of Cairn India's shareholders-including Cairn Energy (52.1%) and Vedanta (28.5%)-had voted for acceptance of the government conditions so that the transaction can conclude.

The company board, which met on 14th September, accepted the shareholder's mandate, but added a caveat that the conditions would be accepted only upon receiving a NOC from ONGC.

Sources said Cairn India had conveyed the same to ONGC in a formal letter it wrote shortly after the board meeting, seeking formal approval for the Vedanta deal.

Cairn India currently does not pay any royalty on its 70% stake in the Rajasthan fields. Royalty, as per the contract, is paid by state-owned ONGC, which got a 30% stake in the 6.5 billion barrel field for free.

However, even before the $9.6 billion Cairn-Vedanta deal was announced in August last year, ONGC had demanded that like all other taxes, royalty should be added to the project cost, considering it as revenues earned from oil sales before profits were split between partners.

Cairn had opposed this as it would lower its profitability and had also initiated arbitration against the government, contesting its liability to pay oil cess on its share. It believed that cess, like royalty, was also the liability of ONGC.

"The acceptance of royalty as being cost-recoverable and the withdrawal of the arbitration pertaining to cess will be concomitant with transfer of control of Cairn India," the company said in a letter seeking approval for the deal from ONGC, which holds a stake in eight out of the company's 10 properties in India.

Cairn currently produces 125,000 barrels of oil per day (bpd) from the Rajasthan block and believes the output could rise to 300,000 bpd (15 million tonnes a year).

Cairn Energy, which is selling a 40% stake in its Indian unit to Vedanta, had previously said it would rather call off the deal than force Cairn India to accept the government's conditions.

Cairn India had on 26th July stated that its April-June quarter net profit would halve to Rs1,435 crore if royalty on the Rajasthan crude oil was made cost-recoverable.


Mumbai Airport does not have a shuttle service while other metros have excellent connections from their airports to cities

Mumbai Airport is the busiest and caters to the country’s financial capital, but is the only one without a bus shuttle—Bengaluru, Hyderabad, Kolkata and New Delhi already have such an efficient service in place

Time and again, we are reminded that Mumbai is India's financial capital, home to India Inc and a major contributor to the national exchequer. But if you have just touched down after a harrowing flight, heaven forbid if you don't have a vehicle waiting for you.

Even as major cities like Bengaluru, Hyderabad and Kolkata provide efficient and excellent airport shuttle services to passengers, the country's busiest airport Chhatrapati Shivaji International Airport at Mumbai is the only one which lacks such a shuttle service.

Moneylife has written on the plight of Mumbai's airport: Please See: You have landed at Mumbai. Where's the shuttle to go home?  on 19th September, and the second part on 20th September BEST will start a dedicated Mumbai Airport shuttle but it wants a dedicated lane).

Transport experts say that if all other major cities provide such efficient shuttle services, it is even more important to start a similar service, with enough luggage handling systems and capacity to handle the high frequency of flights at Mumbai airport, considering the woes of travellers and growing passenger demand.

At the Bangalore International Airport Limited (BIAL), which is located 45km away from the city, the shuttle service started by the Bangalore Metropolitan Transport Corporation connects well with important parts of the city such as Jeevan Bhima Nagar, HAL Airport, JP Nagar, MG Road, Koramangala, Hebbal and outskirts such as Whitefield, and Electronics City.

This air-conditioned Volvo service called 'Vayu Vajra', has gained popularity among commuters for its high frequency-one bus in every 10-15mns-and spacious luggage compartments. It also has easy en route pick-up points. The service is available 24x7, which is in sync with arrival and departure schedules of BIAL and the fare is affordable, ranging between Rs80-Rs200. There is also a non air-conditioned shuttle service to BIAL, known as 'Suvarna', which offers comfortable travel and affordable fares.

A similar successful service is available in Hyderabad. For the 22km distance between the Rajiv Gandhi International Airport and the main city, an efficient bus shuttle named 'Aero Express' provides comfortable travel for passengers. It also has enough luggage space along with facilities such as mobile plug-in chargers, television etc.

Aero Express is an air-conditioned, non-stop bus (Volvo) service, which reaches important points in the city such as the Secretariat, Mehdipatnam, Kukatpally, Hitech City, LB Nagar, Begumpet, Tarnaka and also to twin city Secunderabad. The one-way fare is Rs180 and the to-and-fro airport fare is Rs300. The shuttle service is available round the clock with a frequency of 30 minutes.

Kolkata's Netaji Subhash Chandra Bose International Airport has a Volvo-based shuttle service in place. The West Bengal Surface Transport Corporation runs
air-conditioned buses every 30 minutes from the centre of town-Esplanade, connecting it with the airport. Volvo City Bus Services is a public-private partnership between the state's transport department and Kaushik Logistics in the Airport-Tollygunge route.

At Delhi airport, a recently started train service, the Delhi Airport Express, provides easy transport to passengers.

But as we have reported, public bus transport provider BEST is reluctant to provide a dedicated shuttle service to Mumbai's Chhatrapati Shivaji International Airport. It has demanded dedicated lanes to provide such a service. The absence of such a service is leaving passengers stranded at the airport terminals, for two hours at times, as cabbies often refuse to ply and there is a dearth of pre-paid taxis.

How long will passengers (not) be taken for a ride?



Manish Kamdar

6 years ago

Also another fact is that HYD & BLR Airports are far from the city and the cost of a Fleet Cab would be 300 to 500 atleast. Compare that with the 150 to 200 bus fare, makes it much better. Maybe we should stop the comforts of the Fleet Cabs or better still would be to let the black and yellows rot so that no one in his right frame of mind will get onto them. Cool cabs as it is are a serious obnoxious hazard.

Nagesh Kini FCA

6 years ago

I've travelled in the Vaju Vajra a number of times. It is par excellance.
It's time the BEST wakes up.Or lets some one else like independent school bus transporters to take over. The dedicated lane is the Traffic Police to manage and painting yellow lines is MCGM's job. If they have the will it is not at all difficult to put in place.

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