More decline on the cards following global sell-off
The risks associated with the negative outlook for the US economy announced by the chief of the US central bank on Wednesday night, resulted in the domestic benchmarks recording their biggest one-day fall in more than two years. Both the indices opened well below yesterday's close and the slide continued for the entire day, with the Sensex closing 4.13% down and the Nifty losing 4.08%.
The rout in the US market overnight after Federal Reserve chief Ben Bernanke's warning that the outlook for the world's largest economy was grim, roiled Asian markets this morning and all the major bourses in the region traded with deep cuts. The Indian market opened lower today, extending Wednesday's decline. The Nifty opened 79 points lower at 5,054 and the Sensex resumed trade below the 17,000 mark at 16,828, down by a huge 237 points.
The indices touched their intra-day highs in initial trade, the Nifty at 5,060 and the Sensex at 16,834. However, an institutional sell-off right from the opening bell kept the benchmarks and sectoral gauges in the red.
At the end of its two-day meeting on Wednesday, the Federal Open Market Committee said it would purchase $400 billion of long-term debt and sell an equal amount of short-term treasuries, thus extending the average maturities of treasuries in its portfolio. It, however, added, "There are significant downside risks to the economic outlook, including strains in global financial markets." The plan-named Operation Twist-would also persuade banks to put some of their idle reserves to work. The depressive comments cast a gloom on the markets worldwide.
The domestic market continued to plunge in the noon session, as the European markets opened similarly lower. The market fell to the day's low in the last half hour, the Nifty to 4,908 and the Sensex to 16,316. However, the benchmarks closed marginally above the lows on a minor pullback towards the end of the session. At the close, the Nifty closed below the 5,000 mark at 4,924, down 210 points and the Sensex tumbled 704 points to settle at 16,361. The National Stock Exchange (NSE) witnessed trade of 62.44 crore shares today.
The advance-decline ratio on the NSE was a dismal 183:1549.
The Indian rupee also fell over 1.9% today to its lowest level in the past 26 months, on the back of developments in the US. In intra-day trade today the rupee touched 49.11 to a dollar after opening at 48.82, then pulled back a bit, after the Reserve Bank of India sold dollars, it was reported.
The mayhem in the market did not spare the broader indices and the BSE Mid-cap index and the BSE Small-cap index declined 3.10% and 3.14%, respectively.
All sectoral indices settled in the negative. The BSE Realty (down 5.67%) was the top loser, followed by BSE Metal (down 4.34%), BSE Oil & Gas (down 4.19%), BSE TECk (down 4.10%) and BSE Bankex (down 3.98%).
The Sensex, too, had no green ticks today. The top losers were Jaiprakash Associates (down 9.33%), DLF (down 7.16%), Sterlite Industries (down 6.82%), Reliance Industries (down 6.16%) and Tata Motors (down 5.98%).
ACC (up 0.03%) was the lone gainer on the Nifty. The major losers were Jaiprakash Associates (down 9.81%), Reliance Communications (down 8.26%), DLF (down 7.83%), Sterlite Industries (down 7.27%) and RIL (down 6.85%).
Markets in Asia settled sharply lower. Adding to the woes, HSBC's China Flash PMI showed factory output at 49.4 in September, down for the third month on a decline in new orders. The slowdown in new orders is expected to retard export growth, analysts said.
The Shanghai Composite fell 2.78%, the Hang Seng tumbled 4.85%, the Jakarta Composite dived 8.88%, the KLSE Composite declined 2.20%, the Nikkei 225 tanked 2.07%, the Straits Times sank 2.55%, the Seoul Composite fell 2.90% and the Taiwan Weighted tanked 3.06%.
Back home, foreign institutional investors were net buyers of equities worth Rs243.45 crore on Wednesday. On the other hand, domestic institutional investors were net sellers of shares worth Rs15.48 crore.
State-owned mining major NMDC has inked an agreement to purchase a 50% stake in Australia-based Legacy Iron Ore, as cornerstone investor for nearly A$19 million. The deal will be the first foreign acquisition for NMDC, which has been scouting for natural resources abroad in countries like Russia, United States, Afghanistan, Uzbekistan, Canada and South Africa. The stock plunged 4.90% to close at Rs239.80 on the NSE.
Public sector lender Union Bank of India has sought capital support of Rs350 crore from the government to shore up its lending capacity. The proposed capital infusion would help increase the government's stake in the bank from 57.07% to 58%. The stock tanked 3.92% to settle at Rs232.70.
IT services major HCL Technologies today opened a new Global Delivery Centre in Redmond, Washington, where the company will initially invest $4 million (about Rs19 crore), leading to the creation of 400 jobs over the next two years.
The centre will support the company's continued global expansion plans and increased focus on business innovation in software product development, test engineering and business-critical platform development, HCL Technologies said in a statement. The stock tumbled 4.95% to close at Rs385.05.
The regulatory direction is likely to benefit lakhs of policy holders, who face either rejection or delayed settlement of their claims on technical grounds
New Delhi: In a big relief to policyholders, the Insurance Regulatory Authority of India (IRDA) on Wednesday asked insurance companies not to mechanically reject claims on technical grounds, like delay in filing claim documents, reports PTI.
IRDA has issued these directives following complaints that claims are being rejected on grounds of delay in intimation and submission of documents to insurers.
"Rejection of claims on purely technical grounds in a mechanical fashion will result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation," the regulator said in a communication to life and non-life insurance companies.
Although the policyholders are required to file claims within a prescribed time frame, the IRDA said, "This condition should not prevent settlement of genuine claims, particularly when there is delay in intimation or in submission of documents due to unavoidable circumstances."
The regulatory direction is likely to benefit lakhs of policy holders, who face either rejection or delayed settlement of their claims on technical grounds.
Advising insurers to suitably enunciate their stand to condone delay on merit in policy papers, the regulator said "...such limitation clause (of filing documentation) does not work in isolation and is not absolute".
It further said insurers should develop a mechanism to handle such claims with "utmost care and caution".
Insurers, it said, must not repudiate claims unless the reasons of delay are specifically ascertained and recorded.
Besides, the insurers should satisfy themselves that the delayed claims would have otherwise been rejected even if reported in time.
Sunny with a 16.95 km per litre of fuel economy will be available to customers across the country without any waiting period for delivery
Japanese automobile manufacturer Nissan's Indian subsidiary has launched its sedan car Sunny the 1.5-litre petrol engine car is priced at Rs5.78 lakh for the base model and Rs7.68 lakh for the top-end model (ex-showrooms in New Delhi).
It said it aimed to sell 12,000 units of the new car by the end of this fiscal. "We are planning to sell 40,000 units across all models available in India by the end of this fiscal. Of this, we aim to sell around 12,000 units of Sunny," Nissan Motor India managing director Kiminobu Tokuyama said at the launch.
The new car would compete with other mid-size sedans like Verna Fluidic, Ford Fiesta, Honda City, SX4 and Fiat Linea. The company further said that bookings for the new sedan have been started and the deliveries would be made in October. "Sunny with a 16.95 km per litre of fuel economy will be available to customers across the country without any waiting period for delivery," the company said in a statement.
The sedan Sunny is powered by a four-cylinder, 1.5-liter double overhead camshaft petrol engine, which can churn out a power of 99 PS at the rate of 6,000 rpm. The car boost of a large rear knee room for rear seat passengers, large centre armrest with cup holders in the rear seat.