Share prices still under pressure: Friday Closing Report

Nifty is trapped in a narrow range of 5,200 and 5,400

Gains in the second half of trade, despite unsupportive global cues, helped the market close nearly 1% higher on Friday. The gains were also supported by Goldman Sach’s latest Asia-Pacific Quarterly Outlook report, which upgraded Indian stocks to ‘marketweight’ from ‘underweight. However, the sentiment remains guarded with the market still under pressure. The Nifty is expected to remain trapped in the narrow range of 5,200 and 5,400. The National Stock Exchange (NSE) saw a comparatively low volume with 66.70 crore shares traded today.

Recovering from the steep losses seen on Thursday, the domestic market opened higher on renewed institutional buying at lower levels. However, global cues were not very supportive as the US markets settled lower overnight on concerns about global economic growth. The US trend was reflected in the Asian pack, which was mixed in morning trade.

Back home, the Nifty gained 28 points to open trade at 5,256 and the Sensex resumed trade at 17,228, up 62 points over its previous close. Across-the-board buying helped the indices stay in the green till 10.05am. However, the market came off the highs as investors resorted to profit booking at higher levels. The benchmarks dipped into the red to their intraday lows at around 10.25am. At that point, the Nifty stood at 5,220 and the Sensex touched 17,179.

The fall was short-lived as fresh buying soon lifted the indices into to positive. Fluctuating in the green, the upmove expanded as trade progressed. Early gains in the key European indices also supported the sentiments in the post-noon session.

Goldman Sachs, in its  latest Asia-Pacific Quarterly Outlook report released on Thursday, upgraded Indian stocks to ‘marketweight’ from ‘underweight’, saying domestic growth will pick up, while stock valuations remain "relatively attractive."

The market hit its intraday high in the last hour with the Nifty rising to 5,312 and the Sensex touching 17,458.  However, volatility resulted in the indices paring some of the gains at the close. The Nifty closed 50 points higher at 5,278 and the Sensex settled 165 points up at 17,362.

The advance-decline ratio on the NSE was 756:662.

Among the broader indices, the BSE Mid-cap index gained 0.61% and the BSE Small-cap index rose 0.40%.

BSE TECk (up 1.62%); BSE Realty (up 1.61%); BSE IT (up 1.38%); BSE Bankex (up 1.27%) and BSE Fast Moving Consumer Goods (up 1.16%) were the top sectoral gainers while BSE Metal (down 0.51%) and BSE Consumer Durables (down 0.11%) settled lower.

Hero MotoCorp (up 4.08%); Bharti Airtel (up 3.69%); Sun Pharma (up 2.71%); GAIL India (up 2.39%) and HDFC Bank (up 2.24%) were the toppers in the Sensex list. The losers were led by Jindal Steel (down 1.90%); Maruti Suzuki (down 1.68%); ONGC (down 1.26%); Coal India (down 1.25%) and Hindalco Industries (down 1.02%) were the main losers on the index.

The top performers on the Nifty were Jaiprakash Associates (up 4.31%); Ambuja Cements (up 3.90%); Hero MotoCorp (up 3.59%); Bharti Airtel (up 3.57%) and Cairn India (up 2.77%). The top laggards were Jindal Steel (down 2.13%); Maruti Suzuki (down 1.75%); Siemens (down 1.09%); Coal India (down 1.05%) and ONGC (down 1%).

Markets in Asia closed mixed on growth concerns as German and French manufacturing activity witnessed a sharp decline in March. The news follows similar grim news from China yesterday. Meanwhile, Singapore’s Straits Times index gained as a report showed the city-state’s inflation rate unexpectedly slowed for a third month in February.

The Jakarta Composite gained 0.13%; the KLSE Composite rose 0.16%; the Straits Times advanced 0.36%; the Seoul Composite added 0.04% and the Taiwan Weighted climbed 0.21%. On the other hand, the Shanghai Composite declined 1.10%; the Hang Seng dropped 1.11% and the Nikkei 225 tanked 1.14%. At the time of writing, the key European indices, which opened higher, slipped into the red and the US stock futures were mixed.

Back home, foreign institutional investors were net buyers of shares totalling Rs246.56 crore on Thursday. On the other hand, domestic institutional investors were net sellers of equities amounting to Rs133.13 crore.

Manappuram Finance today said it will reduce the loan amount to 60% of the gold value, at par with the Reserve Bank of India (RBI) directions. Currently, the average Loan-to-Value (LTV) offered by Manappuram Finance on its gold loan is at 66%. RBI earlier this week had directed all NBFCs not to sanction loan beyond 60% of the value of gold jewellery. The stock declined 1.63% to close at Rs36.30 on the NSE.

ING has selected Finacle to transform its core banking software and Infosys will power multiple business areas of the bank such as deposits and loans, savings and current accounts amongst others. With this transformation, ING aims to modernise its growing customer base in Belgium. Infosys settled 1.65% higher on the NSE at Rs2,875.10 apiece.

German carmaker Audi has chosen Steel Strips Wheels (SSWL) for the supply of steel wheel rims for its A6 platform. The business has a potential of exports worth over 20.28 million euros (equivalent to around Rs137 crore) over a period of four years. The company expects to start supplies in 2012-13. SSWL climbed 1.16% to close at Rs227.10 on the NSE.


SKS securitises loans worth Rs321 crore

Two rated pool assignment transactions worth Rs221 crore and two non-rated assignment transactions worth Rs100 crore from two public sector and two private banks totals to Rs321 crore, SKS said in a statement.

SKS Microfinance, India's only listed micro lender said it has completed securitisation of Rs321 crore with four leading banks.

The Rs321 crore securitisation transactions come close on the heels of two other transactions worth Rs243 crore and Rs354 crore in January and February 2012 respectively. There have been six transactions in this year so far are worth Rs918 crore.

In addition, the company had obtained term loans worth Rs240 crore from three public sector banks. All these add up to a debt inflow of Rs1,158 crore.

Two rated pool assignment transactions worth Rs221 crore and two non-rated assignment transactions worth Rs100 crore from two public sector and two private banks totals to Rs321 crore, SKS said in a statement.

The present set of four transactions worth Rs321 crore has been obtained at an annual interest rate of 12%, priced 150 basis points lower than the previous two transactions, it added.

According to S Dilli Raj, chief financial officer, SKS Microfinance, fund flow has been gaining momentum in recent months with the overall environment turning positive for the microfinance sector.

“Contributing in a big way to such optimism is the fact that the RBI has issued guidelines for the NBFC-MFIs on 2 December 2011 coupled with the firm steps taken by the central government to table the Microfinance Institutions Development and Regulation Bill in the present session of Parliament and also Finance Minister Pranab Mukherjee’s special mention of the Government's decision in this regard during his Budget speech last week,” Mr Raj said in a statement.

SKS Microfinance Limited has so far completed 15 assignment/ securitisation transactions post the AP MFI Act.

The pool comprises receivables from micro women borrowers from the weaker section as defined by the RBI. Pool receivables are identified from 18 non-Andhra Pradesh states where SKS operates, it added.

All these rated papers have shown robust collection efficiency of more than 98%. Credit enhancement has not been utilised in any of these structures, according to SKS.


Lokpal: Govt, Opposition to iron out differences in Budget session recess

At the all-party meet of Rajya Sabha members convened by the Prime Minister at his residence, it was agreed that the government will work for a consensus on the wording of contentious aspects of the Lokpal and Lokayuktas Bill

The government stepped up efforts to iron out differences on contentious aspects of the Lokpal Bill, with the Prime Minister, Dr Manmohan Singh, meeting leaders of various parties during which it was decided that the legislation could be taken up during the second half of the Budget Session.

At the all-party meet of Rajya Sabha members convened by the Prime Minister at his residence, it was agreed that the government will work for a consensus on the wording of contentious aspects of the Lokpal and Lokayuktas Bill during the intervening period of the Budget Session.

“The government along with major political parties will come out with a consensus. The government is committed to bring the Bill in this session. ...The actual wording of the Lokpal Bill will be worked out during the intervening period the Budget Session,” CPI(M)’s Mr Sitaram Yechury told reporters. He said the Bill cannot come up during the first half of the current session ending 30 March 2012, as the Budget has to be passed before the end of the current financial year.

“The Bill will be taken up in the second half. This week it cannot come up in this session as the Budget has to be passed,” said Mr Yechury.

There was consensus in the meeting on having Lokayuktas in states, but the prerogative for their appointment will be that of the state, he said.

UPA’s allies Trinamool Congress and DMK also raised the issue that the centre should not interfere with the powers of the states for having Lokayuktas.

Trinamool leader Mr Sukhendu Roy said, “We opposed the inclusion of Lokayukta appointment in the Lokpal Bill in its present form as it will harm the federal structure.”


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