Expect an oversold bounce which may take Nifty to 5,450
The market which saw listless trade in the absence of any triggers, ended flat with a positive bias on Tuesday, reflecting the small gains accrued by Asian markets today. The Sensex and Nifty opened at 18,016 and 5,385, respectively, and hit an intra-day high at 18,110 and 5,423 in the early afternoon. Oil & gas, auto, banking, realty and consumer durable stocks supported early gains. Also, Asian markets, which were weak in early trade, were higher in subsequent trade, supporting investor sentiments here. While the key indices were positive, the gains were marginal in the absence of any major trigger.
There was selling pressure from institutional investors after news about inflationary pressures that could impact economic growth. The market hit its intra-day low, lower than that of yesterday, at 17,934 and 5,367. But value buying came in immediately afterwards and the market closed positive. The Sensex closed at 18,012, up 19 points, and the Nifty closed at 5,395, a gain of 8 points. The advance-decline ratio on the National Stock Exchange was 642:744.
In the broader markets, the BSE Mid-cap index settled flat and the BSE Small-cap index declined 0.04%.
In the sectoral space, BSE Capital Goods (up 1.19%), BSE Consumer Durables (up 0.81%), BSE Bankex (up 0.57%), BSE Oil & Gas (up 0.20%) and BSE Healthcare (up 0.19%) were the top gainers. BSE Fast Moving Consumer Goods (down 0.94%), BSE Realty (down 0.58%) and BSE PSU (down 0.37%) were the major losers.
Larsen & Toubro (up 1.75%), Cipla (up 1.62%), Hero Honda (up 1.33%), ICICI Bank (up 1.27%) and Tata Steel (up 1.24%) were the top performers on the Sensex. Reliance Infrastructure (down 1.88%), DLF (down 1.84%), ITC (down 1.45%), State Bank of India (down 1.39%) and TCS (down 1.07%) settled at the bottom of the index.
The government is likely to miss the revenue collection targets during 2011-12, mainly on account of high inflation and moderating economic growth. "Inflation can affect domestic demand and thereby adversely affect GDP growth... and consequently our tax collection," revenue secretary Sunil Mitra said, during his address at the annual conference of chief commissioners and directors general of income tax.
Markets in Asia, with the exception of the Shanghai Composite closed higher, albeit with marginal gains, after the Goldman Sachs Group expressed optimism in commodities. Among Japanese stocks, Sony surged 2.7%, following an announcement that it expects to return to profits in fiscal 2011. The electronics major reported a net loss of 260 billion yen ($3.2 billion) for the last fiscal year.
The Shanghai Composite edged lower following Goldman Sachs lowering its economic growth forecasts for China to 9.4% this year, from 10% previously, citing recent weak economic data, high oil prices and supply constraints.
The Hang Seng rose 0.09%, the Jakarta Composite gained 0.20%, The KLSE Composite advanced 0.21%, the Nikkei 225 climbed 0.17%, the Straits Times added 0.08%, the Seoul Composite rose 0.29% and the Taiwan Weighted closed 0.10% higher.
Back home, foreign institutional investors were net sellers of stocks worth Rs293.56 crore on Monday. On the other hand, domestic institutional investors were net buyers of shares worth Rs194.22 crore.
A recent study reveals that fund managers have a bearish outlook for the equity market over the next three months. But most of them would rather retain their existing portfolio and not make any changes to their exposure to equities
A recent survey has revealed that fund managers have a cautious view of both the equity and debt markets. A majority of the fund managers (among 16 Asset Management Companies, or AMCs) who took the latest survey conducted by ICICI Securities in May consider the Indian equity market to be "fairly valued".
By the end of the year, most of these managers surveyed expect the Sensex to be in the range of 17,500-21,500, according to the survey. But for the next three months, the fund heads have taken a neutral to bearish view of the overall market, due to growing concerns over high crude oil prices and possible continuing monetary tightening by the apex bank.
With this current outlook of the market, most of the fund managers say that they prefer to maintain their current asset allocation and prefer not to make any changes in their equity exposure.
More than 60% of the fund managers, from the 16 AMCs that were surveyed, believe that mid-caps would be a better investment option than large-caps, over a one-year period.
With regard to earnings growth, these fund managers have a moderate view. But, contrary to market expectations, 44% of the fund managers believe that earnings would be in the range of 10%-15% for the year 2011-12. For the following financial year 2012-13, 62% of the managers expect earnings growth to above 15%.
A major fear factor for most of the fund managers is the high level of crude oil prices. Compared to other global risks for the Indian equity market, high crude oil prices peak at 88% as a factor for concern, whereas other factors like the European Union debt crisis and the Chinese slowdown just account for 13% each as causes for concern.
When told to rank their most preferred sector, pharma led the pack followed by IT and BFSI (Banking, Financial Services and Insurance). The saturated telecom sector and the cement industry were at the last of the list. Despite the fact that the Reserve Bank of India might allow new banking licences, fund managers were bullish on private sector banks.
A study argues that there is too much uncertainty in biometrics to predict how well the technology will perform in the real world, much less support investment in this technology
Three scholars who have provided the academic foundation for the biometrics industry, particularly in the Western world, say that the level of uncertainty in biometrics is so great that tests prove nothing.
The academicians have, in a paper titled "Fundamental issues in biometric performance testing: A modern statistical and philosophical framework for uncertainty assessment", argued that the level of uncertainty in biometrics is so great that they cannot be used to predict how well the technology will perform in the real world and therefore this cannot support a valid argument for investment in biometrics.
The academicians are James L Wayman from San José State University, Antonio Possolo, head of the statistical engineering division at the US National Institute of Standards and Technology (NIST), and Anthony J Mansfield from UK National Physical Laboratory, all recognised as stalwarts of the biometrics industry.
However, the Unique Identification Authority of India (UIDAI), which has embarked on a tagging programme that is based on biometrics, is silent on the report. The institution has, till now, been quick to associate with other academic groups.
While UIDAI claims that biometrics will allow it to deliver a unique identification, it has goofed up its own test results while pushing its ambitious Aadhaar project. (Read, 'How UIDAI goofed up pilot test results to press forward with UID scheme'.)
Since its inception, UIDAI has tried to force the use of biometrics for the UID number as the ultimate solution. UIDAI conducted a proof of the concept trial of the Aadhaar project between March and June 2010. The results of the concept trial, or scenario test, suggest that biometrics cannot be reliable and may encounter huge problems while dealing with false positives.
David Moss, who spent eight years campaigning against the UK's National ID (NID) card scheme, sees hard times ahead for the global mass consumer biometrics industry. He said, "Not only has the industry lost its academic support, but governments are starting to abandon ship. President Obama's plans for trusted identity on the web make no mention of biometrics. The same goes for the UK's plans for identity assurance, in which case also there is no mention of relying on biometrics at all."
"The superstitious belief in mass consumer biometrics is like an illness, it's like the tulip mania that affected Holland in the 17th century. And now, perhaps, it is passing. Even in Holland, where they announced last month that they have suspended their plans to develop a centralised population register recording every person's biometrics," Mr Moss said.
There are three types of tests used for biometrics. One is the lab or technology test; the other is the operational or field test; and the third is a scenario test. A biometrics technology test is conducted in the lab and is entirely computer-based. An operational test is conducted in the field, in the real world, with the biometrics package coming under attack from different, unpredictable sets. In a scenario test, researchers recruit a putatively representative sample of the population so that they can test the biometrics packages with real people under still fairly controllable conditions. The UIDAI used the scenario test for UID.
On the scenario test, the three academicians write, "The test repeatability and reproducibility observed in technology tests are lost in scenario testing due to the loss of statistical control over a wide range of influence quantities. Our inability to apply concepts of statistical control to any or all of these factors will increase the level of uncertainty in our results and translate to loss of both repeatability and reproducibility. Test data from scenario evaluations should not be used as input to mathematical models of operational environments that require high levels of certainty for validity."
This exactly is the reason why governments across the globe are not emphasising on biometrics anymore. Last year, the newly-elected government in the UK scrapped the National ID programme citing huge costs, impracticality and ungovernable breaches of privacy associated with the programme. Last month, the US released its 'National Strategy for Trusted Identities in Cyberspace' signed by president Obama and nowhere has the 45-page document used the word 'biometrics'.
Also in April, the Dutch government suspended its plan to develop a centralised flat print fingerprint population register, citing concerns about security and reliability of the system.
However, this is not the case with India, where it seems that there is ample money and nobody cares about security, reliability and privacy, and everybody from politicians, corporates to the media are 'greased', directly or indirectly. This is the reason why UIDAI is forcing the UID number onto gullible citizens.
"Why is India spending billions on Aadhaar, which depends on biometrics whose reliability is, so say the titans, utterly unknowable? And will the UIDAI ever answer my question how they can claim to offer unique identification when, based on their own figures, they would have to perform 18,000,000,000,000 (18 trillion or 18 lakh crore) manual checks to prove uniqueness? And why do they think Aadhaar will eradicate corruption, rather than automate corruption," asks Mr Moss.
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