Share prices to move in a narrow range: Monday Closing Report

Nifty support and resistances are at 5,415 and 5,545

Domestic economic uncertainties along with signs of a global slowdown resulted in the market settling flat, amid a high degree of volatility. However, the gains in the broader indices helped to restrict the losses.

Tracking the downtrend in the global markets, the domestic bourses opened on a soft note today. Concerns over the possibility of the Reserve Bank of India (RBI) hiking key rates by an estimated 25 basis points in its policy review this week, also weighed on sentiments. The Sensex opened 27 points lower at 18,242 and the Nifty was down 16 points at 5.470. Oil & gas, IT, realty and metal stocks saw selling pressure in early trade.

Index heavyweights Reliance Industries (RIL) and Maruti Suzuki pushed the benchmarks to the day's low in mid-morning trade; the Sensex dropped 148 points to 18,121 and the Nifty was down 47 points to 5,437 from its previous close.

The market touched the day's high in noon trade as the Sensex touched 18,313 and the Nifty scaled to 5,497. But choppiness resulted in the market coming off the highs and the indices closed flat. At the end of trade, the Sensex and the Nifty lost three points each, settling at 18,266 and 5,483, respectively. The Nifty support lies at 5,415 and resistance is at 5,545. We don't expect any major moves beyond this until the RBI meeting on 16th June.

The advance-decline ratio on the National Stock Exchange was 670:704.

The broader indices were more resilient and ended in the positive with the BSE Mid-cap index gaining 0.28% and the BSE Small-cap index rising 0.30%.

The BSE Consumer Durables index (up 1.39%) was the top gainer in the sectoral space. It was followed by BSE Power (up 0.74%) and BSE Capital Goods (up 0.71%). The major losers were BSE Metal (down 0.99%), BSE Oil & Gas (down 0.74%) and BSE Realty (down 0.30%).

Jaiprakash Associates (up 3.18%), NTPC (up 2.27%), Cipla (up 2.05%), Reliance Communications (down 1.78%) and Bajaj Auto (up 1.25%) were the top performers on the Sensex. The laggards were led by Hindalco Industries (down 2.22%), RIL (down 1.84%), Tata Steel (down 1.12%), TCS (down 1.10%) and State Bank of India (down 1.02%).

The top Nifty gainers were Jaiprakash Associates (up 3.68%), Cipla (up 2.27%), NTPC (up 2.13%), Sun Pharma (up 1.97%) and BPCL (up 1.86%). Hindalco (down 2.38%), RIL (down 2.11%), Sesa Goa (down 2.02%), Dr Reddy's (down 1.73%) and Tata Steel (down 1.15%) were the top losers on the index.

Markets in Asia settled mostly lower on Monday on news of a fall in Japanese machinery orders in April and a fall in lending by Chinese banks in May, adding to the indicators of a slowdown in the global economy. The Chinese data fuelled fresh concerns of a rate hike by the country's central bank.

The Shanghai Composite declined 0.16%, the Jakarta Composite tanked 1.03%, the KKSE Composite fell by 0.66%, the Nikkei 225 was down 0.70%, the Straits Times declined 0.63% and the Taiwan Weighted tumbled 1.41%. On the other hand, the Hang Seng gained 0.39% and the Seoul Composite added 0.10%.

Back home, foreign institutional investors were net sellers of stocks worth Rs170.05 crore on Friday, whereas domestic institutional investors were net buyers of shares worth Rs336.98 crore.

Oil regulator, the Directorate General of Hydrocarbons (DGH) has refused to accredit three natural gas discoveries made by Reliance Industries at its KG-D 6 block, where revival of sagging output depends on production from new finds.

The DGH rejected D-30, D-31 and D-34 finds in the KGDWN-98 /3 or KG-D 6 block as commercially exploitable discoveries on account of low reserves they may hold, sources privy to the development said. RIL settled 1.84% lower in trade today.

The country's largest car-maker Maruti Suzuki India's (MSI) Manesar facility continues to be completely shut down, with a workers' strike at the plant entering its 10th day today.

Around 2,000 workers at the plant have been on strike since 4th June, resulting in a loss of about Rs390 crore on account of a 7,800-unit hit in output till Saturday. The factory had its weekly off on Sunday. The Maruti Suzuki stock lost 0.17% by the close of trade today.


Two-thirds of QIPs from 2010 trading at huge discount, says Crisil study

 Median return on investments on about 50 QIPs issued in 2010, calculated up to 3 June 2011, is a negative 19%. Fewer companies likely to raise funds through this route over next few months

Two out of every three Qualified Institutional Placements (QIPs) done in calendar year 2010 have given negative returns and this is likely to dissuade other companies from using this route to raise funds over the next few months.

According to a study by ratings agency CRISIL, 33 out of 50 QIPs were trading below their offer prices. The median return on investments, calculated up to 3 June 2011 was a negative 19%. This compares with a positive 2% in the broader S&P CNX NIFTY in the same period.

Real estate, construction, IT and ITeS, and textile companies were the major underperformers.

"Fund raising through QIPs has dried up in 2011. Given the current market conditions, we expect investors' appetite for QIPs to remain low," said Tarun Bhatia, director - capital markets, CRISIL Research. "This, coupled with the weak performance of past QIPs, may restrict investors from investing in upcoming issues. So, companies may have to search for an alternative route to raise funds."

Only one company successfully carried out a QIP during January-March 2011, raising Rs4 billion, compared to six companies that raised Rs19 billion in the previous corresponding quarter.

The worst performer (in percentage terms) was Aksh Optifibre. The stock is trading 66% below the offer price. On the other hand, Welspun India's issue generated maximum wealth. The Welspun stock price is trading 72% higher than its offer price.

In 2010, an improvement in the economic scenario saw a significant spurt in QIP activity with 50 companies raising about Rs225 billion through this route. More than half the amount, or about Rs125 billion, was raised by about 20 companies in financial services, real estate and construction, IT&ITeS, and automobile (and auto component) manufacturers. The largest issue was by Adani Enterprises which raised Rs40 billion in August 2010.

Mr Bhatia pointed out that companies generally preferred the QIP route to take advantage of better pricing during a bull run. However, recent governance-related issues and the Reserve Bank of India's monetary tightening had dampened investor sentiments.



nilesh mehta

6 years ago

can i have detail list of all these company

Anil Agashe

6 years ago

Good for them QIPs were not known to invest at right valuations anyway in most cases. And if they are investing in smaller companies then the risk will be more. What is interesting to know is how many of them used CRISIL's research?.

Have toolbox to deal with tax havens not sharing info: FM

As per the ‘toolbox’ to check black money, payments made to entities located in countries and tax jurisdictions that refuse to share tax-related information will attract a withholding tax, or tax deducted at source, of 30% or more

New Delhi: Under pressure from civil society to take concrete action on black money, the government today said it has enough tools to deal with transactions arising from non-cooperative jurisdictions and would take action as and when necessary, reports PTI.

“We have developed a toolbox... We have enabled ourselves to declare (tax havens) as non-cooperating jurisdiction and countries as and when the situation arises. We will take appropriate steps,” finance minister Pranab Mukherjee told reporters here today.

However, he added that as of now, ‘no country’ has been put in the category of a ‘non-cooperating jurisdiction’.

India, the minister said, is negotiating Double Taxation Avoidance Agreements (DTAA) with several countries and also entering into Tax Information Exchange Agreements (TIEA) with tax havens.

‘We are getting substantial co-operation,’ he said.

The government, the minister further added, has developed a ‘toolbox’ to deal with non-cooperative jurisdictions by making appropriate changes in the Income Tax Act, 1961.

As per the ‘toolbox’ to check black money, payments made to entities located in countries and tax jurisdictions that refuse to share tax-related information will attract a withholding tax, or tax deducted at source, of 30% or more.

The G-20 leaders had asked each country at the Seoul summit last year to develop a toolbox of counter-measures against non-cooperative jurisdictions.

Under the proposed provisions, the government will notify the countries and jurisdictions that are reluctant to share banking information and other details with it.


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