Nifty may hit 5,320 in the short-term
Factoring in the 25 basis point rate hike by the Reserve Bank of India (RBI), the market, which witnessed a sharp fall following the announcement, gathered momentum and closed sharply higher. Yesterday we had mentioned that the Nifty would move in the range of 4,990 and 5,160. Today the index opened higher and closed well above the resistance—at 5,192. This is the highest close since 5th August. From here we may see the Nifty reach the level of 5,220 and then to 5,320.
The market opened higher but cautiousness prevailed ahead of the RBI quarterly monetary policy review, where it was widely perceived that the central bank would hike interest rates by 25 basis points. The Nifty began the day at 5,138; 40 points higher than its previous close, and the Sensex gained 74 points to open trade at 17,013. Banking, IT, metals and realty stocks supported early gains.
The indices continued their upward journey till the mid-morning session. But the RBI’s policy announcement pulled the market into the negative with consumer durables, banking and realty sectors witnessing selling pressure. The steep fall led the market to its intraday low. At the low, the Nifty touched 5,086 and the Sensex fell below the 17,000 mark to 16,900.
The indices hovered on both sides of the neutral line for more than an hour, after which buying activity resumed once again, giving the market a much-needed push. Auto, IT, oil & gas and technology sectors helped the market hit the day’s high. At the intraday high, the Nifty rose to 5,211 and the Sensex reclaimed the 17,000 level to settle at 17,322. The market extended its gains for the second day in a row with the Nifty adding 93 points at 5,192 and the Sensex closing at 17,255, up 316 points. The National Stock Exchange (NSE) saw a volume of 66.49 crore shares. Volumes were higher because today was the expiry date for October derivatives.
The advance-decline ratio on the NSE was 750:893.
In the broader market space, the BSE Mid-cap index gained 0.40% while the BSE Small-cap index shed 0.07%.
BSE Auto (up 2.95%), BSE IT (up 2.66%), BSE Oil & Gas (up 2.22%), BSE TECk (up 2.19%) and BSE Metal (up 1.93%) were the top sectoral gainers while BSE Consumer Durables (down 2.94%), BSE Bankex (down 1.20%) and BSE PSU (down 0.05%) were the losers.
The top performers on the Sensex were Mahindra & Mahindra (up 5.49%), Wipro (up 4.29%), HDFC, Sterlite Industries (up 4.23% each) and Sun Pharma (up 3.80%). SBI (down 3.52%), HDFC Bank (down 3.17%) and BHEL (down 1.07%) made up the losers’ list.
Kotak Bank (up 6.18%), M&M (up 5.08%), Sterlite Ind (up 5.05%), ACC (up 4.99%) and Grasim Industries (up 4.96%) were the top five Nifty gainers. Punjab National Bank (down 4.66%), Axis Bank (down 4.33%), SBI (down 3.48%), HDFC Bank (down 2.59%) and BHEL (down 0.82%) ended at the bottom of the index.
Markets in Asia settled mostly higher as investors awaited the outcome of a key European summit tomorrow where policymakers are expected to chalk out the expansion of the bailout fund.
The Shanghai Composite surged 1.66%; the Hang Seng climbed 1.05%; the Jakarta Composite added 0.10%; the KLSE gained 0.54%; the Straits Times rose 0.33% and the Taiwan Weighted advanced 0.28%. On the other hand, the Nikkei 225 declined 0.92% and the Seoul Composite lost 0.51%.
Back home, foreign institutional investors were net buyers of stocks worth Rs101.10 crore on Monday. On the other hand, domestic institutional investors were net sellers of equities worth Rs158.84 crore.
IT consulting and software services provider, Sonata Software, has established a dedicated centre of excellence (COE) for mobility, with a dual focus on supporting independent software vendors (ISVs) and enterprises. The new COE will develop new frameworks and solutions accelerators to enable faster mobile application development across platforms such as android, windows, mobile, blackberry, IOS, J2ME and MEAP (such as Sybase unwired platform). The stock lost 0.90% to close at Rs27.60 on the NSE.
State-owned GAIL India plans to source a shipload of liquefied natural gas (LNG) to commission the long-delayed LNG import facility adjacent to the beleaguered Dabhol power plant. The company stated that dredging of the navigation channel is in full swing and it plans to commission the terminal in the last quarter of the current fiscal. The stock shed 0.16% to close trade at Rs425 on the NSE.
Sezal Glass, leading player in the architectural glass business, has said it would invest about Rs500 crore to expand its value-added glass business with manufacturing set ups across India. The stock surged 11.36% to settle at Rs2.45 on the NSE.
The major objectives of the NMP are to increase the sectoral share of manufacturing in GDP to at least 25%, create 100 million jobs by 2022 and enhance global competitiveness of the sector
New Delhi: The government today cleared the long-awaited National Manufacturing Policy (NMP) which seeks to set up mega industrial zones and create 100 million jobs by 2022, reports PTI.
“The NMP seeks to enhance the share of manufacturing in the gross domestic product (GDP) to 25% within a decade and create 100 million jobs in manufacturing as part of the inclusive growth agenda of the UPA,” commerce and industry minister Anand Sharma said after the Cabinet approved the policy.
To encourage the manufacturing sector, the government will provide fiscal incentives to the industry, particularly to the small and medium enterprises (SMEs).
The Cabinet had earlier taken up the NMP in its meeting on 15th September. The matter was, however, deferred following differences between ministries over the labour and environment issues.
It was later referred a Group of Ministers (GoM) headed by agriculture minister Sharad Pawar.
The NMP, Mr Sharma said, “will ensure compliance of labour and environmental laws while introducing procedural simplifications and rationalisation so that the regulatory burden on the industry is reduced.”
He said the interventions proposed are generally sector neutral, location neutral and technology neutral, except the attempt to incentivise green technology for sustainable development.
“No subsidy is proposed for individual units or areas. The basic thrust is to provide an enabling environment for tapping the potential of the private sector and the entrepreneurial skills of the younger population,” Mr Sharma said.
The major objectives of the NMP are to increase the sectoral share of manufacturing in GDP to at least 25%, create 100 million jobs by 2022 and enhance global competitiveness of the sector.
Besides, it focuses on domestic value addition, technological depth and environmental sustainability of growth.
The policy envisages specific interventions broadly in the areas of industrial infrastructure development and improvement of the business environment through rationalisation and simplification of business regulations.
Besides, development of appropriate technologies, especially green technologies for sustainable development, and skill development of the younger population are envisaged, Mr Sharma said.
The NMP aims at creating large integrated industrial townships—National Investment and Manufacturing Zones (NIMZs).
“The land for these zones will preferably be waste infertile land which is not suitable for cultivation; not in the vicinity of any ecologically fragile area and with reasonable access to basic resources,” Mr Sharma said.
The contribution of the manufacturing sector is just over 16% of India’s GDP, currently.
With a view to accelerating the growth of the manufacturing sector, Mr Sharma said that the manufacturing policy proposes to create an enabling environment suitable for the sector to flourish in India.
With the increase in housing loan ceiling, the limit of subsidy for an individual borrower would go up to Rs14,865 per year for a loan of Rs15 lakh on reducing balance basis from the present limit of Rs9,910 for a loan of Rs10 lakh
New Delhi: The government today raised the housing loan ceiling for availing 1% interest subsidy to Rs15 lakh from existing Rs10 lakh, a decision that will benefit borrowers by up to Rs14,865 per annum, reports PTI.
A meeting of the Union Cabinet approved the proposal to give 1% interest subsidy for home loans of up to Rs15 lakh provided the actual cost of the house is not exceeding Rs25 lakh.
Under a scheme introduced in 2009, home loan borrowers are getting 1% interest subsidy on home loans of up to Rs10 lakh, provided the cost of the house did not exceed Rs20 lakh.
“A budgetary provision of Rs500 crore has been made for the financial year 2011-12 for implementing the scheme,” minister of state for information and broadcasting Ambika Soni reporters after the Cabinet meeting.
With the increase in housing loan ceiling, the limit of subsidy for an individual borrower would go up to Rs14,865 per year for a loan of Rs15 lakh on reducing balance basis from the present limit of Rs9,910 for a loan of Rs10 lakh, Ms Soni said.
The government has designated the National Housing Bank (NHB) as the nodal agency for implementing the scheme both for scheduled commercial banks and housing finance companies, the minister said.
Finance minister Pranab Mukherjee in his Budget speech this year had announced liberalisation of the existing scheme of 1% interest subvention on housing loans.
The existing scheme of 1% interest subvention of housing loan up to Rs10 lakh provided the cost of the housing unit does not exceed Rs20 lakh was approved by the Cabinet in September 2009, she said.
The scheme provides interest subsidy on housing loans as a measure to generate additional demand for credit and to improve affordability of housing in the lower and middle income groups, Ms Soni said.
Earlier the Reserve Bank of India and the NHB were designated as nodal agencies for implementing the scheme for scheduled commercial banks and housing finance companies, respectively.