Share prices may wilt further: Tuesday Closing Report

Watch out for 5,340 on the Nifty for possible support

A couple of negative corporate news reports pulled down the indices in trade today. The State Bank of India and ONGC emerged as the top losers as the country's biggest lender reported a huge decline in profit and the oil explorer was hurt by buzz that it would have to share more of the subsidy burden to offset the losses incurred by oil majors.

As expected, the market opened sideways, tracking weak cues from bourses across Asia. The Sensex opened 29 points up at 18,374 and the Nifty resumed trade at 5,496, down three points from its previous close. Even though headline inflation for April was lower at 8.66%, investors are worried that the government and the Reserve Bank of India (RBI) will continue to take harsh steps to moderate prices. The market touched the day's high at around 9.45am, with the Sensex at 18,436 and the Nifty touching 5,524.

After staying in the green for almost an hour, the indices lost steam and slipped into negative terrain. The market was range-bound in the absence of any major trigger. Oil & gas was the biggest sectoral loser on reports that the government has increased the contribution of upstream oil companies towards sharing the subsidy burden of fuel marketing firms to 38.5% of the Rs77,922-crore estimate for FY10-11.

The benchmark indices slipped further in afternoon trade, on lacklustre results from the State Bank of India. The news pulled down the banking sector, which ended as the second-biggest sectoral loser. The indices touched the day's low in post-noon trade, as the Sensex fell to 18,085, down 260 points, and the Nifty lost 78 points to 5,421.

The market staged a minor recovery in the last hour, but still closed in the negative for a second day in a row. The Sensex closed 208 points lower at 18,137 and the Nifty ended the session down 60 points at 5,439. The advance-decline ratio on the National Stock Exchange was a negative 438:948.

The market is losing ground and is expected to fall further. The next support for the Nifty lies at 5,340.

Among the broader markets, the BSE Mid-cap index declined 0.66% and the BSE Small-cap index fell by 0.61%.

BSE Oil & Gas (down 3.23%) BSE Bankex and BSE PSU (down 2.24% each), BSE Auto (down 1.02%) and BSE Capital Goods (down 1.02%) were the top sectoral gainers. On the other hand, BSE Consumer Goods (up 0.97%), BSE Fast Moving Consumer Goods (up 0.53%) and BSE IT (up 0.15%) were gainers till worth mentioning.

The top Sensex gainers were Jindal Steel (up 1.97%), Hindustan Unilever (up 1.60%), TCS (up 1.30%), ITC (up 0.83%) and DLF (up 0.64%). SBI (down 7.78%), ONGC (down 6.71%), Hero Honda (down 3.39%), Reliance Industries (down 2.53%) and Reliance Infrastructure (down 2.17%) were the top losers.

The government announced today that the new Index of Industrial Production has been approved by the Committee of Secretaries (CoS). It will come into effect from 10th June and have the base year of 2004-05.

The production trend in a 100 new items, including ice cream, fruit juices and mobile phones will weigh on measuring the pace of industrial production, as per the new index series approved by the government.

Markets in Asia closed mostly in the red, on concerns about a slowdown in economic recovery worldwide. Ric Spooner, Sydney-based analyst, said investors would remain cautious in view of the global developments. Concerns about the debt issues troubling countries in Europe and weak economic data from the US is also weighing on investor sentiments.

Recovering from early losses, the Shanghai Composite gained 0.13% and the Nikkei 225 added 0.09%. On the other hand, the Hang Seng declined 0.26%, the Seoul Composite fell by 0.08% and the Taiwan Weighted was down 0.31%. Stock markets in Singapore, Malaysia, Indonesia and Thailand were closed for holidays.

Back home, institutional participation in the equities segment was meagre on Monday. Foreign institutional investors were net buyers of stocks worth Rs47.07 crore and domestic institutional investors were net purchasers of shares worth Rs3.41 crore.


SEBI plans to commence investor call centre with 10 agents

Besides complaints, the call centre would attend investor calls on issues like trading accounts and complaint status. Besides complaints, the call centre would attend investor calls on issues like trading accounts and complaint status

New Delhi: Market regulator Securities and Exchange Board of India (SEBI), which receives well over 100 investor complaints a day, plans to initially have about 10 agents at its proposed call centre to be managed by an outside agency to redress such grievances, reports PTI.

"It is estimated that the helpline services would require 10 persons initially to provide the nation wide helpline service to SEBI," the regulator said in an addendum to its tender inviting bids from agencies interested in setting up the call centre.

SEBI floated the tender early this month as it plans to outsource its investor helpline service to a third-party call centre. Besides complaints, the call centre would attend investor calls on issues like trading accounts and complaint status.

It will also provide assistance in matters like transfer and transmission of shares, IPOs, etc.

Besides, the call centre would also require to provide guidance on status of companies on whether they are unlisted, sick, vanished or delisted besides matters pertaining to other regulators that are not under the SEBI purview.

In the long run, SEBI wants a minimum 500-seat operation capacity for one shift and a 1,500-seat capacity for three-shift operations, with equal number of call centre agents.

The decision to outsource its investor helpline came within weeks of SEBI deciding to rope in third-party agencies for processing and maintenance of investor grievances.

Faced with the Herculean task of handling thousands of investor complaints, SEBI had taken a decision in this direction in March last week to resolve such grievances on a fast-track basis.

SEBI received more than 32,300 investor complaints in 2009-10, while the numbers are even higher at over 39,600 in the first nine months of the current fiscal. Since SEBI's inception, the total number of investor grievances has swelled to over 2.7 million.

Incidentally, SEBI is in the process of finalising a set of regulations for outsourcing of work by various market intermediaries such as brokers, mutual funds and investment bankers.

The regulator is, however, said to be against outsourcing of the market entities' core and investor-sensitive activities.


SBI Q4 profit plunges to Rs 21 crore on rise in provisions

The erosion in standalone net profit is mainly on account of higher provisioning against bad loans, operating expenses including employee cost besides tax outgo of over Rs900 crore

Mumbai: State Bank of India's (SBI) net profit nosedived to Rs20.9 crore during the fourth quarter ended 31 March 2011 fiscal against Rs1,866.60 crore in the same quarter previous fiscal, reports PTI.

The erosion in standalone net profit is mainly on account of higher provisioning against bad loans, operating expenses including employee cost besides tax outgo of over Rs900 crore.

Total income during the quarter rose 18% to Rs26,536.8 crore from Rs22,474.1 crore in the corresponding period a year ago.

Despite dismal performance, the bank maintained the dividend at 300% for 2010-11. It will pay a dividend of Rs30 per share on face value of Rs10 after getting the shareholders approval.

For the fiscal ended March 2011, the net profit slipped by 10% to Rs8,264.5 crore compared with Rs9,166.05 crore in the previous fiscal.

However, the total income rose to Rs97,218.9 crore during the fiscal against Rs85,962.07 crore in FY 2010.

During the fourth quarter, SBI made a provision of Rs3,263.9 crore against bad debts compared with Rs2,186.7 crore in the same period a year ago, an increase of 49%.

At the same time, tax outgo during January-March quarter rose to Rs1,901.8 crore from Rs977.8 crore in the same period a year ago. Operating expenses of the bank including employee cost also rose to Rs6,793.8 crore from Rs6,036 crore.

On a consolidated basis, the net profit of the SBI Group declined by 7% to Rs11,179.9 crore for the year ended 31 March 2011 compared with Rs12,013.6 crore a year ago. Total income increased to Rs1,47,843.9 crore from Rs1,13,093 crore.




6 years ago

Is there a big scam in the pipeline with all the public sector banks?
Huge increase of around 40-50% in the non performing assets and such a huge provision for bad debts for a bank which makes the genuine lenders run from pillar to post for months to sanction a loan. There is no clarification as to the main reason of such a big increase. Hope am wrong.

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