Despite the rally today, it is not clear which way the market will move
The Indian market opened flat, tracking the weak Asian markets in the aftermath of the huge earthquake that struck the north-eastern region of Japan on Friday. Concerns over the Reserve Bank of India's (RBI) move on interest rates in its mid-quarter policy review on Thursday also kept investors on the sidelines. Metal, oil & gas and banking counters witnessed decent demand pushing the indices higher in mid-morning trade.
The marginal rise in headline inflation for February resulted in the market paring some of the earlier gains and trading was range-bound thereafter. The indices touched intra-day highs in late trade, on all-round buying support that began post-noon. The market closed a tad below the day's high.
Both the Sensex and the Nifty opened with a negative gap at 18,167 and 5,437, respectively. However, immediately thereafter, the market raced higher. There was some hesitation for a while, but eventually the indices headed higher and closed near the highs of the day at 18,439 and 5,532 respectively. The Sensex (up 1.46% or 266 points) and Nifty (up 1.58% or 86 points) closed at their best levels in eight days, both in terms of percentage and points. The advance-decline ratio on the National Stock Exchange was 913:752.
Today, the market was trading close to its extreme levels, after which there is a strong probability of a reversal.
The market breadth on the Sensex and Nifty was positive. The Sensex ended with 25 gainers and four losers, while one stock remained unchanged, and the Nifty had 46 advancing stocks and four in the declining list. The broader markets under-performed the Sensex with the BSE Mid-cap index gaining 0.49% and the BSE Small-cap index adding 0.26%.
All sectoral gauges settled in the green with the BSE Oil & Gas (up 2.24%) emerging the top gainer. Other major gainers were BSE Metal (up 2.01%), BSE IT (up 1.48%), BSE Bankex (up 1.36%) and BSE Power (up 1.27%).
Reliance Communications (up 4.36%), Tata Power (up 3.72%), Reliance Infrastructure (up 3.48%), Tata Steel (up 3.27%) and Jaiprakash Associates (up 2.68%) were the top performers on the Sensex, while Bharti Airtel (down 0.40%), Hindustan Unilever (down 0.16%), ONGC (down 0.14%) and Hero Honda (down 0.06%) ended at the bottom of the list.
India's headline inflation rose marginally to 8.31% in February, driven by high food and fuel prices, which may prompt the Reserve Bank of India (RBI) to hike interest rates when it reviews the monetary policy later this week. The inflation rate stood at 8.23% in January this year, whereas it was 9.42% in February last year.
Finance minister Pranab Mukherjee has expressed the hope that inflation should come down to 7% by the month-end. He pointed out that monthly fluctuations in inflation do not give a correct picture.
Markets in Asia settled mixed with the Nikkei 225 suffering its biggest single-day decline in two years, dipping to its lowest level since November 2010. Japanese automobile, electronics and oil refining companies led the index lower, as most facilities have shut down after the tragedy that has destroyed infrastructure in the northeast region.
Other markets in the region were stable, implying that the earthquake will not have an immediate effect in neighbouring economies. The South Korean market was lifted on speculation that steelmakers would have to cope up with increased demand from Japan.
The Nikkei 225 sank 6.18%, the KLSE Composite shed 0.02%, the Straits Times declined 0.26% and the Taiwan Weighted lost 0.56%. The Shanghai Composite gained 0.17%, the Hang Seng rose 0.41%, the Jakarta Composite advanced 0.78% and the Seoul Composite surged 0.80%.
Back home, foreign institutional investors were net sellers of equities worth Rs243.58 crore on Friday, whereas domestic institutional investors were net buyers of stocks worth Rs112.24 crore.
Diamond Power Infrastructure (down 1.35%) has bagged an order worth Rs85.37 crore from Power Grid Corporation of India to supply 3,216km of 400KV HV DC line overhead conductors associated with transmission systems for Krishnapatnam UMPP (Part A). The company has also secured an order from Gayatri Projects for supply of equipment for the MPPKVVCL project. The revised order book of the company stands at Rs1,650 crore.
Educomp EduReach, the ICT division of Educomp Solutions (up 1.43%) has received a letter of intent (LoI) from the government of Maharashtra for implementation of ICT Schools Project-Phase 2 in the Nashik and Latur regions, covering 540 secondary and higher secondary schools from class V to XII. The order is worth Rs67.93 crore and it will be implemented on a build, own, operate and transfer (BOOT) model over a period of five years.
Fortis Healthcare (up 0.88%) has signed a partnership pact with TotipotentRX Cell Therapy, a leading provider of cutting- edge technologies in the stem cell and regenerative medicine market to set up centres of excellence offering cellular therapies and stem cell clinical trials, across selected Fortis hospitals. The centres will undertake stem cell clinical research relating to diabetes, cancer, cardiovascular disease and hospitals for processing stem cells before transplantation.
The Budget proposal to impose a 5% service tax on healthcare services evoked sharp reaction from the medical community which described the tax as "misery tax". Finance minister Pranab Mukherjee today said that he would respond to the representations on tax issues next week
New Delhi: Amid concerns by the medical community on the proposed service tax on healthcare, finance minister Pranab Mukherjee today said in the Rajya Sabha that he would respond to the representations on tax issues next week, reports PTI.
Following the reply of Mr Mukherjee on general discussion on the Budget, the Rajya Sabha returned the Appropriations Bills, completing the first phase of the three-stage exercise for passage of the Budget.
The Lok Sabha had earlier approved the Supplementary demands for grants for 2010-11 and relevant Appropriation Bills.
"That can be announced or decided only at the time of Finance Bill. Therefore I will request those who are agitating to wait till the Finance Bill is being approved by Parliament," he said while referring to his proposal to impose 5% service tax on high-end health care.
The Finance Bill is likely to be considered by Parliament next week. The budget session of Parliament would conclude on 25th March.
Mr Mukherjee in the budget for 2011-12 proposed to impose a service tax of 5% on all services, including diagnostic services provided by centrally air-conditioned clinical establishments having more than 25 beds for in-patient treatment.
The proposal evoked sharp reaction from the medical community which described the service tax on healthcare as "misery tax". They have also submitted representation against the proposal to the finance minister.
SEBI website describes open offer application "under process", after inadvertently stating earlier in the day that it was cleared
New Delhi: Market regulator Securities and Exchange Board of India (SEBI) has clarified that it has not yet cleared the Vedanta group's open offer for Cairn India that is mandatory for the conclusion of the London-based mining group's $9.6 billion acquisition to foray into the oil sector, reports PTI.
The SEBI website this evening listed as "under process" the Vedanta group's Rs13,610 crore open offer to acquire a 20% stake in Cairn India. This is a change from earlier in the day when the market regulator said that it had been cleared.
When contacted, a SEBI official said that it was "an inadvertent error" when the website showed "final observations issued" by SEBI for the proposed transaction. The official said that the open offer was yet to be cleared. SEBI's "final observations" are a go-ahead for an open offer.
London-listed Vedanta had in August last year agreed to buy up to 51% stake in Cairn India from Cairn Energy Plc. Following the acquisition, its group firm Sesa Goa was to make an open offer for buying an additional 20% in the company which owns India's largest onland oil field.
But the company could not make the open offer, following an oil ministry intervention with SEBI. The ministry said that the deal was contingent upon government approval, which is still under process.
SEBI is holding back the approval for the open offer as the government is yet to give its go ahead.
Some in Cairn/Vedanta had wanted to delink the government approval and the open offer saying even if the state consent did not come, Vedanta could become a minority shareholder in Cairn India.
But SEBI has refused to delink the issue, as the Rs355 per share open offer price is part of the $9.6 billion transaction, and the open offer could only be made if the original deal had been concluded.
The Rs13,631 crore open offer was first scheduled to open on 11 October 2010 and close on 30 October 2010, but following the oil ministry letter, SEBI refused to give approval to the issue.