If today’s low breaks, Nifty likely to fall to 4750
After volatile movement for some days now, the Nifty today ended at its lowest level on its current decline. If the Nifty does not close above 5,000 in the next few days, we may see a fall to the 4,750 level in the next few days.
Taking a cue from global markets, the domestic market opened higher with the Nifty rising resuming trade at 4,915, up 25 points from its previous close, while the Sensex was higher by 53 points at 16,338. The opening level was the highest for the day for the Nifty. Healthcare stocks were sought after in the initial session.
Sharp volatility saw the indices move in and out of the red in the first hour itself. Profit booking in select sectors resulted in the indices drifting southwards. The market made a half-hearted attempt to emerge into the positive in noon trade, but the sellers pulled it lower in no time. The market moved sideways in subsequent trade.
Late in the day, a sharp sell-off by institutional investors dragged the indices to their intra-day lows, the Nifty fell to 4,825 and the Sensex slipped back to 16,104. But the market managed to pull itself together and close off the day's lows. The Nifty ended the day at 4,840, down 49 points, and the Sensex finished 139 points lower at 16,146.
The advance-decline ratio on the National Stock Exchange (NSE) was a negative 576:1122.
Among the broader indices, the BSE Mid-cap index declined by 0.88% and the BSE Small-cap index fell by 0.82%.
The sectoral gainers were BSE Realty (up 0.44%), BSE Healthcare (up 0.3%) and BSE Fast Moving Consumer Goods (up 0.18%). The laggards were led by BSE IT (down 2.07%), BSE Metal (down 1.86%), BSE Bankex (down 1.40%), BSE Consumer Durables (1.27%) and BSE TECk (down 1.20%).
The top performers on the Sensex were DLF (up 2.67%), Tata Motors (up 1.91%), Sun Pharma (up 1.27%), Bharti Airtel (up 1.18%) and ONGC (up 1.11%). The major losers were Jindal Steel (down 4.52%), Jaiprakash Associates (down 4.50%), Hero MotoCorp (down 3.10%), Infosys (down 2.68%) and HDFC (down 2.65%).
The leaders on the Nifty were DLF (up 2.80%), PNB (up 2.60%), Ambuja Cements (up 2.45%), Reliance Communications (up 2.26%) and Tata Motors (2.18%). JP Associates (down 5.22%), SAIL (down 3.92%), HCL Technologies (down 3.87%), Jindal Steel (down 3.82%) and Infosys (down 2.91%) were the top losers on the index.
Markets in Asia, which opened higher on support from overnight gains on Wall Street, settled mostly in the green as investors await the outcome of the Federal Reserve meeting on Friday. Fed chief Ben Bernanke last year used the Jackson Hole speech to unveil the quantitative easing bond-buying programme. However, analysts do not expect any similar moves this time.
The Shanghai Composite jumped 2.92%, the Hang Seng climbed 1.47%, the Nikkei 225 advanced by 1.54%, the Straits Times gained 1.69% and the Seoul Composite rose by 0.56%. On the other hand, the Jakarta Composite shed 0.07%, the KLSE Composite lost 0.30% and the Taiwan Weighted declined by 1.23%.
Back home, continuing their sell-off foreign institutional investors were net sellers of stocks worth Rs883.48 crore on Wednesday. On the other hand, domestic institutional investors were net buyers of equities worth Rs561.10 crore.
State-owned Oil and Natural Gas Corporation (ONGC) has drawn up plans to drill eight wells in its gas discovery block in the prolific Krishna-Godavari basin, off the Andhra coast, to appraise finds it has made in the area. The company estimates that the block holds an in-place volume of 25.61 million tonnes of oil and 197 billion cubic metres of natural gas. It is proposing an investment over $7.7 billion to produce up to 30 million standard cubic metres per day of gas from the block. The stock gained 2.01% to close at Rs284.50 on the NSE.
The country's largest private power generation company Tata Power plans to invest around Rs1,000 crore over the next three years to lay its own cable network in Mumbai for power distribution, a senior company official said. The company serves eight lakh customers using the wire networks of the BEST and Reliance Infrastructure to distribute electricity in the city and the suburbs, respectively. Tata Power also has its own network in certain parts of the metropolis. The stock settled 0.65% higher at Rs1,045 on the NSE.
L&T Construction today said it has secured an order worth Rs797 crore in the building and factories segment. The order has been secured from a leading developer for mixed use construction, comprising pre-dominantly residential, including retail and commercial developments, at Mumbai, the company said. The L&T stock lost 0.44% to end at Rs1,551.20 on the NSE.
Speak Asia COO Tarak Bajpai has been granted bail, but he is afraid that police from other places may arrest him. According to sources, the company may approach the Supreme Court to seek anticipatory bail
Speak Asia, the troubled multi-level marketing (MLM) company, could remain in the water for many more days, if not some months or years. The company's chief operating officer (COO) Tarak Bajpai, who is in custody, is apparently not willing to come out of jail fearing that police from other states may be looking to arrest him.
According to information posted on the Internet by some agents of Speak Asia, Mr Bajpai was granted bail by the Thane District Court. However, police from Madhya Pradesh, Rajasthan, Goa and Pune were said to be waiting outside the court to arrest Mr Bajpai. So, in order to avoid being arrested all over again, the company's counsel advised that Mr Bajpai petition the Supreme Court for anticipatory bail.
One such post reads: "Court ne bail manjoor kar li, lekin layer (lawyer) ne mana kar diya kyoki aur jagah se complain bhi hua hai. Agar Tarak sir baahar aate toh fir se giraftar ho jate. Is isthiti (is paristhithi) mein layer (lawyer) ne nirnay liya ki ab Supprim Court se Agrim jamant lenge. Jis se ki jo aur jagah company ke khilaf FIR hua hai, koi pooch tach ke liye inko giraftar na kare. MONDAY ko SC se bail mil jayega, tab Tarak sir bahar aa jayenge, fir SOAL ka painding work shuru ho jayega." However, this information could not be confirmed from the company's legal team.
In the meanwhile, according to some panellists, the company has also requested the Reserve Bank of India (RBI), to postpone its meeting, citing non-availability of its officials. Speak Asia had asked for an appointment with the RBI and accordingly the central bank had fixed a meeting for 24th August, in the second half of the day. However, on the morning of 24th August, Speak Asia sent an email to the RBI saying that since its officials were in jail, the meeting be postponed to another date. Speak Asia had to get an order from the Bombay High Court to fix an appointment with the RBI.
This statement from Speak Asia is yet another example of the lies the company has been spreading. Harendar Kaur, chairperson and chief executive officer (CEO) of Speak Asia (see the image below), had sent a letter seeking an appointment to the RBI. Manoj Kumar, the company's CEO for India, is alleged to be in hiding in Dubai, while there is no information about other officials, like Narayanan Rajagopalan, president for emerging markets, and Vivek Gautam, chief marketing officer (who was reported to have been sacked for making big claims about big clients).
Some other officials of the company were also present at the press conference called by Speak Asia on 16th May in Mumbai, but there is little information about their whereabouts. Till date, the Mumbai police and the Economic Offences Wing (EOW) have arrested only one official, that is Tarak Bajpai. The question is why is Speak Asia making it out to be as if many of its officials are in jail?
Only yesterday, during the hearing on two public interest litigations that highlighted the two scams involving Speak Asia and Symbiosis Investment, a division bench of Justice Ranjana Desai and Justice Rajesh Ketkar remarked that such offences should be investigated expeditiously to provide quick relief to victims.
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It might be surprising to know what our babus can do to stop corruption. The second part of a three-part article highlights three instances of honesty and bravery of IAS officers
"Corruption is not just about money. It is also about ethics in public life. Anything that violates it can trigger public anger."
—Venu Srinivasan, managing director, TVS Motors
Let me ask you a question. Which homogenous section of citizens in India can, and must be the first bulwark to hold off the tidal waves of corruption that have been sweeping our land for three decades and more?
Don't laugh. My answer is, the bureaucracy, particularly the Indian Administrative Service.
Do you know apart from the judgments of the Supreme Court which are the opinions that are most difficult to overturn? These are the jottings of senior bureaucrats (of the level of joint secretaries and above) in files dealing with matters involving large sums of money. I make this statement confidently after reporting on the affairs of government for four decades.
For example, a senior bureaucrat vets a file containing a proposal to buy equipment for a public sector company. The amount involved runs into a couple of hundred crores. The bureaucrat senses something fishy in the proposal; he feels that somebody, probably a minister, will get kickbacks. He notes his objection diplomatically: the amount is too high and the proposal can be passed if the cost is cut by, say, Rs50 crore. Any possibility of a kickback is thus thrown out of the window.
No minister, unless he or she is foolishly brave, or courageous as Sir Humphrey Appleby put it in "Yes, Minister", will risk overturning this opinion. The facts could come out any day, the bureaucrat may leak the story to a friendly newspaperman, the Comptroller and Auditor General of India may pounce on it, the vigilance guys may sniff something. It's too dangerous. The minister decides to either drop the matter or move it through another bureaucrat who may be more accommodating.
This is not an imaginary situation. It happens a lot of the time when the bureaucrat is honest and unafraid. Here are three examples about which I have personal knowledge.
In the mid-80s, an international tender was put out for building the HBJ pipeline from Hazira in Gujarat to Jagdishpur in Uttar Pradesh. There were four bidders and two frontrunners emerged: Spie Capag of France and Snam Progetti of Italy. The representative of Snam Progetti was Ottavio Quattarochi, the infamous friend of Sonia Gandhi.
Snam's bid was $100 million costlier than that of Spie Capag. Banking on his well-known friendship with the prime minister's family, Mr Quattarochi tried to use muscle. He is even reported to have personally threatened the then petroleum secretary, GV Ramakrishna. The difference of $100 million in the bids was too much for Mr Ramakrishna to accept. He stood firm in the decision to award the contract to Spie Capag. Even Rajiv Gandhi did not dare interfere. Mr Quottarochi lost and the country saved $100 million.
Next, during Jayalalitha's previous stint as chief minister, the Tamil Nadu Electricity Board put forward a proposal to import high quality coal costing hundreds of crores. One IAS officer, by the name of Mr Sundaram, who was the secretary to the Tamil Nadu government in charge of coal imports, smelt a rat. The coal was too costly; surely a kickback was involved. Mr Sundaram wrote in the file his refusal to clear the import. There was a kickback-this became public knowledge later-and even even Jayalalitha had to back down. Of course, she made life miserable for Mr Sundaram and within a year he resigned from the IAS.
The third instance involves the issue of shares by Southern Petrochemicals Industries Corporation (SPIC), a joint venture with the Tamil Nadu government through the Tamil Nadu Industrial Development Corporation (TIDCO). The chairman of TIDCO was Ms Chandralekha. She found that the share issue would result in heavy losses to the Tamil Nadu government and objected strongly. Jayalalitha backed off for a while.
Some weeks later, Ms Chandralekha was travelling in a car, in heavy traffic, when some goonda put his hand through the window of the vehicle and threw acid on her face. She was horribly burned. Ms Chandralekha resigned from the IAS. There was absolutely no reason for the attack, but the public drew its own conclusions. Ms Chandralekha later joined the Janata Party and became a close associate of Subramaniam Swamy.
If only there were 5,000 IAS officers who are prepared to act as honestly and bravely! If a few IAS officers can block high-level corruption, what is there that cannot be achieved by a band of motivated people?
(R Vijayaraghavan has been a professional journalist for more than four decades, specialising in finance, business and politics. He conceived and helped to launch Business Line, the financial daily of The Hindu group. He can be contacted at [email protected].)