Share prices in a downward trend: Thursday Closing Report

The indices slipped below important levels today. A bullish trend reversal happens above 5,800 on the Nifty

The market closed lower for the fourth consecutive day on fears that the Reserve Bank of India (RBI) will hike key rates at its monetary policy meeting next week, following sustained rise in food inflation.

In the morning, positive global cues helped the market open in the green, albeit with marginal gains. The Sensex was 84 points higher at 19,533 and the Nifty resumed trade at 5,851, up 17 points from the previous close.

The market scaled to its intra-day high in early trade, with the Sensex at 19,542 and the Nifty at 5,856. But the indices slipped following the announcement of a marginal rise in the weekly food inflation numbers. By the end of trading today, the Nifty dropped to below the 5,800 level. The market is now in a downward trend. Immediate support is at 5,750, and further down at 5,700.

The market was choppy throughout the session and the indices touched the day's lows in the last half hour. The Sensex fell by 183 points to 19,266 and the Nifty was down by 57 points to 5,777. The indices closed below their psychological levels; the Sensex declined 157 points to 19,292 and the Nifty fell by 48 points to 5,785. The advance-decline ratio on the National Stock Exchange was 532:1123.

Among the broader indices, the BSE Mid-cap index fell by 0.97% and the BSE Small-cap index ended with a loss of 0.48%.

All sectoral gauges were in the red with rate-sensitive ones ending as the top losers. BSE Realty (down 3.03%), BSE Metal (down 1.20%), BSE IT (down 1.12%), BSE Capital Goods (down 1.06%) and BSE TECk (down 0.93%) led the losers.

ONGC (up 1.99%), ICICI Bank (up 0.92%), Bharti Airtel (up 0.56%), Bajaj Auto (up 0.26%) and Sterlite Industries (up 0.14%) were the gainers on the Sensex. Reliance Communications (down 5.13%), Cipla (down 2.77%), DLF (down 2.71%), Hero Honda (down 2.62%) and Jindal Steel (down 2.17%) were the major losers.

Food inflation inched up marginally to 8.76% for the week ended 16th April from 8.74% in the previous week. This is the second consecutive week that the rate of price rise of food items has gone up, after a period of moderation in February and March.

The latest rise, although marginal, will put more pressure on the government, which has described inflation as one of the major challenges facing the economy.

The RBI has said that deregulation of interest rates on savings banks accounts would benefit savers, as it would enable lenders to come out with innovative products to attract more funds from low income households. This was among its observations in a discussion paper on the deregulation of savings rates which it published today.

While the RBI deregulated interest rates on fixed deposit schemes in 1997, it continues to fix the rate on savings deposits. Presently, banks pay interest at the rate of 3.5% on saving accounts, which was fixed in 2003.

Markets in Asia, which opened on a positive note, tracking overnight gains in the US, settled mixed with the Chinese, Hong Kong and Taiwanese bourses closing in the red. Speculations were rife that China might curb property prices over the weekend.

The Bank of Japan, at the end of its policy meeting today, kept its policy rate unchanged in the range of zero to 0.1% and held off on additional monetary easing steps.

The Jakarta Composite rose 0.11%, the KLSE Composite gained 0.35%, the Nikkei 225 jumped 1.63%, the Straits Times and the Seoul Composite added 0.07% each. On the other hand, the Shanghai Composite tanked 1.29%, the Hang Seng fell by 0.37% and the Taiwan Weighted shed 0.09%.

Back home, foreign institutional investors were net sellers of stocks worth Rs711.86 crore on Wednesday, whereas domestic institutional investors were net buyers of shares worth Rs299.28 crore.


Prime minister ignores former bureaucrat’s plea on Jaitapur nuclear power project

Former power secretary has written repeatedly to the prime minister requesting that the nuclear power plant project be scrapped. He has also warned of a ‘coal scam’ building from the numerous thermal projects sanctioned recently

Two days ago, on the 25th anniversary of the Chernobyl nuclear disaster, the Indian environment and forests minister gave the green signal for the nuclear power plant project at Jaitapur in western Maharashtra. The announcement has been received with the uproar that it deserves. But it's evident that the government is, once again, choosing to ignore the voices of protest.

Among those who have criticised the proposal is EAS Sarma, former power and finance secretary and energy adviser to the National Planning Commission. Mr Sarma has written to prime minister Dr Manmohan Singh urging him to scrap the project and to veto any proposed addition to the existing nuclear power generation capacity. Besides, the government had already given the nod for a massive thermal power project in the same region.
Mr Sarma writes: "I earnestly appeal to you, Mr Prime Minister, to announce the suspension of the Jaitapur project forthwith, and to put on hold similar other projects in the pipeline. Jairam Ramesh's ministry has already cleared more than 1,50,000MW of coal-based capacity. Like the 2G scam, as I had already forewarned you, a major 'coal scam' is unfolding."

Mr Sarma has previously written six letters to the prime minister on the issue, but his pleas appear to have been ignored.

The letter, dated 27th April 2011, also refers to the Fukushima catastrophe. "The liabilities on account of the (Fukushima) disaster run into billions of dollars, many times more than the cost of the plant itself. MNCs responsible for the disaster are queuing up already to share the profits of the clean-up operation. Do you want this to be repeated at Jaitapur?"

These issues have been raised repeatedly, but instead of instead of answering the questions, the government has stuck to mechanical utterances on international standards and safety measures. Mr Sarma is not convinced about the government's seriousness on the matter. "The fact that the MNCs have successfully prevailed upon the government to enact a law to cap the liability of a nuclear accident, and France is hoping to bring down the cap further, demonstrates the low level of confidence that Areva itself reposes in its own reactor design," he says.

He charged that the government was committed to furthering the agreement with the French company Areva, rather than respecting the people's wishes. Areva will build two 1,650MW European pressurised reactors (EPRs) for the 9,600MW nuclear plant at Jaitapur. The $9.3 billion deal was signed during the recent visit of the French president to India. Areva has set up two similar EPRs in Finland, which cost an astounding Rs24 crore per MW.

The government, instead of going for a competitive bidding process, decided to procure the reactors directly. Mr Sarma asks, "Does the PMO expect the people to believe that the Department of Atomic Energy (DAE) and the Nuclear Power Council of India (NPCIL) tried to keep consumers' interests in view and lived up to this assurance regarding transparency and economy?" The Atomic Energy Act itself is shrouded in secrecy.

Mr Sarma also questioned the decision to undertake a comprehensive environment impact assessment report after the plant becomes operational. "Konkan, a region of uniquely rich biodiversity, has been singled out to bear the dangers and the pollution burden of 9,600MW of nuclear power, 15,650MW of coal/gas-based power and three disruptive bauxite mines that will destroy the region's identity. The PMO's assurance of an assessment to be made after the havoc is wrought is like adding salt to injury," he writes.

He is also sceptical about the 'autonomous' Nuclear Authority of India, because he believes it will take the same route that other institutions have taken.

"Negawatts (saved megawatts), instead of new megawatts, are the need of the hour. Planning pundits need to learn from the people of this country who seem to know better about what they want," Mr Sarma says.



Jyrki from Finland

5 years ago

"Areva has set up two similar EPRs in Finland, which cost an astounding Rs24 crore per MW. "

Only one EPR, but it cost about 7 billion euros. Original price was 3 billion €.

K B Patil

5 years ago

The PM is a nuclear hawk and has a closed mind on the matter. He will rest in peace only when the whole of India is blown to bits. Chernobyl and Fukushima have shown us that, whatever the safeguards, nature has a way of teaching us lessons we refuse to learn. Man's greed has overtaken his intelligence and that is the reason we are racing to extinction.

dr YKrishna murty

5 years ago

PM put deaf ear because under d influence of USA..MAN WHO WOES2 destroy D INDIA.

Monetary tightening to pull down India’s GDP to 8.2%: IMF

“In India, base effects and policy tightening are projected to slow growth from 10.4% in 2010 to a more sustainable 8.2% in 2011 and 7.8% in 2012,” the IMF said in its Asia and Pacific ‘Regional Economic Outlook’ report

“In India, base effects and policy tightening are projected to slow growth from 10.4% in 2010 to a more sustainable 8.2% in 2011 and 7.8% in 2012,” the IMF said in its Asia and Pacific ‘Regional Economic Outlook’ report

Washington: India’s economic growth rate will moderate to 8.2% in 2011 from 10.4% in the previous year, and fall further in the next year, mainly because of tight monetary policy measures, reports PTI quoting the International Monetary Fund (IMF).

It cautioned that the strong growth across Asia could lead to overheating, a phenomena when the production capacity of an economy fails to keep pace with aggregate demand.

“The IMF warns that Asia’s rapid recovery from the global economic crisis has been accompanied by pockets of overheating across the region,” it said in its Asia and Pacific ‘Regional Economic Outlook’ report.

“In India, base effects and policy tightening are projected to slow growth from 10.4% in 2010 to a more sustainable 8.2% in 2011 and 7.8% in 2012,” the IMF said.

The IMF report comes close on the heels of Asian Development Bank (ADB) projecting India’s growth at 8.2% for the financial year 2011-12.

The Reserve Bank of India (RBI) has already hiked policy rates eight times since March 2010 to tame inflation. During the annual credit policy to be announced on 3rd May, the RBI is expected to further raise short-term lending (repo) rate by 25 basis points.

The IMF report also said that during 2010, India with a growth rate of 10.4% overtook China which grew by 10.3% during the year.

Pointing out that India and China will play leading role in Asia’s growth, the report said the region’s economy as a whole would see growth rate moderating to 6.8% in 2011 from 8.3% in the previous year. Asia’s growth during 2012 has been projected at 6.9%.

“While we expect inflation in many Asian economies to increase further in 2011 before decelerating modestly in 2012, inflation risks in Asia remain tilted on the upside,” it said.

India’s headline inflation stood at around 9% in end-March, which is higher than the RBI’s projection of 8%, and much above the comfort level of 5%-6%.

The IMF said that the earthquake in Japan last month caused huge loss of life and property and the government’s response helped to contain the economic impact.

“...Spillovers to the rest of Asia through the supply chain should be limited,” it said.

It said that the credit growth was not far from the “boom” levels in a number of economies, while property prices continued to grow rapidly in a few regional markets.

“(There could be) additional risks from higher commodity prices, volatile capital inflows and possible spillovers from Japan’s earthquake," IMF head (Asia and Pacific department) Anoop Singh said.


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