Share prices still in no-man’s land: Monday Closing Report

The Nifty may move in the range of 4,990 and 5,160

In Friday’s closing report, we had mentioned that the Nifty is in a directionless state. The support lies at 4,975, while the upside resistance is at 5,160. Today, the Nifty tried crossing this resistance, but failed. After opening strongly in the positive, both the Sensex and the Nifty hit their intraday highs in the morning session itself. They fell in the post-noon session as fears over a possible RBI (Reserve Bank of India) rate hike fear made the rounds. However, the indices ended in the positive. Still in no-man’s land, the index may move in the range of 4,990 and 5,160. The National Stock Exchange (NSE) gained on a low volume of 47.90 crore shares.

The market opened firm on supportive global cues as markets in Asia were trading higher in morning trade. The Nifty started the day at 5,115; up 65 points and the Sensex surged 225 points to open trade at 17,011. Metals, realty, IT and banking stocks supported early gains.

Trading sideways after a positive opening, the Sensex hit its intraday high of 17,105 in the first half-hour itself while the Nifty touched its day’s high around 11.10am as the index touched 5,146.

The uptrend lost its momentum after the indices touched the day’s highs and began drifting marginally lower as trade progressed, and nervousness set in ahead of the RBI quarterly policy review tomorrow. Analysts opine that the central bank may hike interest rates by 25 basis points (bps) before taking a pause.

The benchmarks fell to their day’s lows in late trade with the Nifty going down to 5,085 and the Sensex retracing itself below the 17,000 mark to 16,899. However, the market closed a tad above those levels. At close, the Nifty advanced 48 points to 5,098 and the Sensex gained 154 points to settle at 6,939.

The advance-decline ratio on the NSE was in favour of the losers at 718:928.

The broader indices settled flat with a negative bias with the BSE Mid-cap index slipping 0.04% and the BSE Small-cap index shedding 0.05%.

In the sectoral space, BSE Power (up 0.57%) and BSE Auto (up 0.01%) were the lone gainers. BSE Bankex (down 0.03%), BSE Capital Goods and BSE Fast Moving Consumer Goods (down 0.02% each) were the noteworthy losers.

Tata Motors (up 4.44%), ONGC (up 4.09%), Hindustan Unilever (up 3.14%), Bajaj Auto (up 3.12%) and TCS (up 2.97%) were the top gainers on the Sensex. The laggards were led by Larsen & Toubro (down 3.11%), State Bank of India (down 2.11%), Coal India (down 1.28%), Sun Pharma (down 0.99%) and HDFC Bank (down 0.45%).

The top movers on the Nifty were Tata Motors (up 4.91%), ONGC (up 3.96%), Reliance Power (up 3.69%), HUL (up 3.50%) and Axis Bank (up 3.31%). The major losers on the index were L&T (down 2.94%), Punjab National Bank (down 1.96%), SBI (down 1.91%), Sun Pharma (down 1.82%) and Coal India (down 1.38%).

Markets in Asia settled with decent gains following a report suggesting that China’s manufacturing output is expected to surge in October, snapping a three-month contraction. The HSBC China Flash PMI reading for October boosted markets in Hong Kong and mainland China. Japanese exports rose 2.4% in September from a year earlier, a sign of an improving economy despite the global slowdown. Signs of progress towards a plan to limit the euro-zone debt crisis also supported investor sentiment.

The Shanghai Composite gained 2.29%; the Hang Seng jumped 4.14%; the Jakarta Composite rose 2.38%; the KLSE Composite advanced 0.78%; the Nikkei 225 rose 1.90%; the Straits Times was up 1.79%; the Seoul Composite surged 3.26% and the Taiwan Weighted settled 2.97% higher.

Back home, foreign institutional investors were net sellers of stocks worth Rs234.01 crore on Friday while domestic institutional investors were net buyers of shares worth Rs73.36 crore on the same day.  

  Public sector lender IDBI Bank plans to raise around $200 million from the Switzerland market under its medium-term foreign debt raising programme. IDBI Bank, which has a $1.5-billion MTN programme, has already raised around $400 million in the first part of this calendar year. The stock settled unchanged at Rs103 on the NSE.

Oriental Bank of Commerce (OBC) and SBI Cards have launched co-branded credit card for the former’s customers. The strategic tie-up with SBI Card gives OBC the perfect platform to extend the relationships with its customers with credit offerings that are unmatched in convenience and flexibility. OBC tumbled 5.13% to settle at Rs281 on the NSE.

Shriram Transport Finance Company’s subsidiary Shriram Automall has drawn up plans to invest Rs1,000 crore for opening 50 automalls by 2013. These automalls will facilitate truckers to replace their vehicles without any delay as it will provide unique platform for the second-hand trucks market. Shriram Transport Finance tanked 4.21% to close at Rs580.50 on the NSE.


CBI doesn’t oppose Kanimozhi’s bail plea in 2G case

Special public prosecutor UU Lalit, appearing for the CBI, said that the agency had no objection if they were granted bail by the court. Following the development, the special CBI court fixed for 3rd November its decision on fresh bail petitions moved by DMK MP Kanimozhi and four other accused in the 2G case

New Delhi: A Delhi court today fixed for 3rd November its decision on fresh bail petitions moved by DMK MP Kanimozhi and four other accused in the 2G case after the Central Bureau of Investigation (CBI) did not object to their plea, reports PTI.

Two days after charges were framed against them, special CBI judge OP Saini reserved his order on the bail petitions of Ms Kanimozhi, Kalaignar TV MD Sharad Kumar, directors of Kusegaon Fruits & Vegetables Asif Balwa, Rajiv Agarwal and Bollywood producer Karim Morani.

During arguments, special public prosecutor UU Lalit, appearing for the CBI, said that the agency had no objection if they were granted bail by the court.

“First bail be granted to them subject to the discretion of this court if the court deems it fit,” Mr Lalit said.

The court, however, will hear the arguments on bail pleas of Swan Telecom promoter Shahid Balwa and A Raja’s former private secretary RK Chandolia as the CBI opposed their petitions.

“I would humbly submit and request the court to consider the bail pleas of these five accused,” Mr Lalit said.

“I do not know how much time each accused has spent in custody but they have at least spent 5-6 months. This court might consider their bail pleas.

“Of course, bail should be given to them subject to the court’s discretion. But the court must ensure their presence during hearings by imposing certain conditions,” he said

He, however, opposed grant of bail to Shahid Balwa and Mr Chandolia, saying, “One can make distinction so far as those for whom maximum punishment can be five years and those against whom maximum punishment can be seven years. At this juncture, I am opposing the bail pleas of accused 3 (RK Chandolia) and accused 4 (Shahid Balwa).”

Earlier in the day, pleading for bail, the 43-year-old daughter of DMK chief M Karunanidhi, who has been in jail for the last five months since her arrest on 20th May, said charges against her have now been framed and as per the order of the Supreme Court, she can approach the special court afresh for bail.

“As per the Supreme Court order on 22nd June in the case of Ms Kanimozhi and Sharad Kumar, liberty was given to them to file fresh application for bail before the special court after framing of charges,” her counsel and senior advocate Altaf Ahmed said.

Invoking the special provision of bail to a woman accused, the counsel said Ms Kanimozhi should be released on bail.

Ahmed submitted that the court could impose any condition to ensure that Ms Kanimozhi does not flee from justice and remains present before the judge as and when required.

He said the accused should be released on bail as the trial in the case will take time since it involves 154 witnesses, 17 accused and 790 documents running into more than one lakh pages.


IPO manipulation continues, recent offerings exhibit extreme volatility and five out of seven IPOs listed in October hit their extremes today

The IPO market has again become a happy hunting ground for manipulators. Out of the seven offerings (most graded with ‘below average’ fundamentals) listed this month, three hit their all-time lows today, while two others hit their all-time highs. When will the powers-that-be step in?

As many as seven Initial Public Offerings (IPOs) have listed this month. Most of these offerings have being rated IPO ‘Grade 2’, signifying ‘Below Average’ fundamentals. Three of these seven hit their all-time lows today, way below their issue price, while two other IPOs hit their all-time high during today’s trading session.

Moneylife was the first publication to recognise the extreme volatility in the IPO market. On 20th October, we had written on three offerings to analyse the amount of volatility in the market by detailing the movement of recent back-to-back IPOs (See: Is IPO price manipulation back? Two recent issues have witnessed extreme gains & losses ).

Again, on 21st October, we exposed how the IPO of M and B Switchgear had been manipulated by five entities controlled by a single director (See: IPO manipulation is back with a bang. Five firms with one director and a profit of nearly Rs9 crore ).

And the rest of the IPOs (a total of four) have also seen erratic fluctuations. RDB Rasayans, a ‘Grade 2’ IPO, was listed on the BSE (Bombay Stock Exchange) at Rs85 on 7th October—8% higher than its issue price of Rs79. During the first day of trading, it hit an all-time high of Rs93.15. However, the stock has fallen considerably from this point since then. It hit its all-month low of Rs13.20 today and finally closed at Rs13.45—83% below its listing price.

Tijaria Polypipes, which got listed on 14th October, mirrors the behaviour of Rasayans. With an issue price of Rs60, it got listed at Rs62. It barely reached its all-time high of Rs67.80 on listing day, when its downfall began. Tijaria hit its all-time low of Rs14.75 today before finally closing at Rs15—75% below its listing price.

Onelife Capital Advisors is another IPO that has surprised us. It was rated ‘Grade 1’ indicating ‘Poor Fundamentals’. However, it was not only listed at Rs115 from an issue price of Rs110, its all-time low has just been Rs114 which was hit on the first day of trading. The stock hit an all-time high of Rs204.70 today before finally closing at Rs197.80—80% above the issue price. Now considering the fact that this IPO had a ‘Poor Fundamentals’ rating, its behaviour is indeed surprising.

Out of the others that listed this month, Prakash Constrowell (listed on 4th October), carried an issue price of Rs138, but listed on the BSE at Rs145. On listing day itself, it hit a high of Rs245 and a low of Rs112.5 till date. It is currently trading on the BSE at Rs190—a premium of 38% of its issue price.

Out of the other IPOs we analysed earlier, Taksheel Solutions hit an all-time low of Rs32.25 today, which was its closing price as well—79% below its issue price of Rs150.

But the scrip which throws up a number of questions is M and B Switchgears. Despite Moneylife exposing the fact that there was clear manipulation in this stock on 21st October, the market—and the regulator—seem to have happily ignored the details in the report.

M and B hit an all-time high of Rs390 before closing at Rs368.10—98% higher than the issue price of Rs186. Despite the huge quantum of bulk deals which we had exposed (and the profit-booking of nearly Rs9 crore), M and B continues on its upward trajectory, defying all logic.

Seeing the volatility in the above-mentioned IPOs, price manipulation cannot be ruled out. The worst part is that this is taking place in broad daylight and right under the nose of the market regulator & the exchanges, but nobody seems to be interested in investigating the issue.




5 years ago

M and B Switchgear started hitting downward circuit. On friday it is down by 20%. Is it an indication of end of operators interest. Will it follow the footprints of SKS Microfinance, Taksheel solutions.


5 years ago

"Despite Moneylife exposing the fact that there was clear manipulation in this stock on 21st October, the market—and the regulator—seem to have happily ignored the details in the report."

Sorry to say, but Moneylife has not exposed anything or anyone.

There is nothing wrong with buying a stock in large quantities or making a large profit from that position.

Again there is nothing illegal about trading in markets using multiple entities.

There may have manipulation, but the trading data does not prove anything at all.

No one can be prosecuted/penalized for trading large quantities of a stock.

Dr Vaibhav Dhoka

5 years ago

The question arises-Who is culprit-SEBI,stock broker,manipulator or INVESTOR's greed,as knowing well our regulator is defunct body known for its hand in glove with brokers and manipulator it is only investors greed is the answer.

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