Nifty to oscillate between 5,065 and 5,200
The market closed higher for a third consecutive day today, in volatile trading, after a positive opening by key European indices supported a sharp rise in domestic stocks in post-noon trade. Going ahead, the Nifty may move sideways in the range of 5,065 to 5,200, until a clear picture emerges.
The market opened with marginal gains, reflecting the Asian markets which were higher in morning trade. The Nifty opened 14 points up at 5,139 and the Sensex resumed at 17,118, up 53 points. IT and metal sectors led the early gains.
However, a bout of profit-booking soon led the indices into negative terrain and the market slipped to the day's low in the first 15 minutes. The Nifty touched 5,098 and the Sensex fell below the 17,000 mark to 16,987.
After range-bound trade till noon, the market witnessed a surge. Buying in select stocks lifted the benchmarks to the day's high in post-noon trade, the Nifty to 5,169 and the Sensex at 17,210.
The market came off the highs again, but closed positive. The Nifty settled 29 points up at 5,153 and the Sensex was up by 101 points to 17,166.
The advance-decline ratio on the National Stock Exchange (NSE) was 874:550.
Among the broader indices, the BSE Mid-cap index rose 0.26% and the BSE Small-cap index gained 0.72%.
The top sectoral gainers were BSE Consumer Durables (up 1.99%), BSE IT (up 1.52%), BSE Oil & Gas (up 1.42%), BSE TECk (up 1%) and BSE Capital Goods (up 0.88%). The major laggards were BSE Metal (down 0.69%), BSE PSU (down 0.28%), BSE Fast Moving Consumer Goods (down 0.27%) and BSE Power (down 0.23%).
The key performers on the Sensex were Cipla (up 2.94%), Reliance Industries (up 2.62%), Tata Motors (up 2.59%), Wipro (up 2.58%) and ICICI Bank (up 2.51%). The main losers on the index were Jindal Steel (down 1.57%), Coal India (down 1.35%), Tata Power (down 1.34%), Tata Steel (down 1.34%) and BHEL (down 0.97%).
The major Nifty gainers were Cairn India (up 4.20%), Ranbaxy (up 4.03%), ICICI Bank (up 3.42%), Cipla (up 3.23%) and Reliance Industries (up 2.88%). SAIL (down 2.84%), Jindal Steel (down 1.61%), Tata Steel (down 1.50%), BHEL (down 1.22%) and NTPC (down 1.07%) were at the bottom of the index.
Markets in Asia, with the exception of China and Hong Kong, settled mostly higher, although the gains were marginal. Chinese stocks ended lower ahead of the release of inflation data on Friday, setting off speculation that the central bank might hike interest rates further. Uncertainty about a fresh stimulus package by the US Federal Reserve also added to the woes.
The Jakarta Composite rose 0.10%, the KLSE Composite gained 0.36%, the Nikkei 225 advanced 0.34%, the Straits Times climbed 0.87%, the Seoul Composite surged 0.72% and the Taiwan Weighted settled 0.26% higher. On the other hand, the Shanghai Composite declined 0.68% and the Hang Seng fell by 0.67%.
Back home, foreign institutional investors were net buyers of stocks worth Rs262.43 crore on Wednesday, while domestic institutional investors were net sellers of equities worth Rs80.81 crore.
The government's statistical department announced today that food inflation declined marginally to 9.55% for the week ended 27th August, from 10.05% in the previous week. The fall in food inflation could be attributed to a moderation in the rate of price rise of some of the items on a week-on-week basis, even though they continued to go up. Despite half a percentage point reduction in food inflation numbers, the Reserve Bank of India is not likely to give up its tough stance in dealing with high costs.
State-run SAIL's massive expansion drive to increase its steel production capacity to 21.40 million tonne per annum (MTPA) on an investment of Rs61,870 crore is expected to be completed by 2012-2013. Following the expansion, the company's crude steel production capacity will increase from 12.84 MTPA to 21.40 MTPA, while its hot metal production capacity will increase from 13.82 MTPA to 23.46 MTPA. The stock declined by 2.84% to Rs118 on the NSE today.
Nectar Lifesciences has received the approval of the US Food and Drugs Administration (FDA) for its Active Pharmaceutical Ingredients (API) manufacturing plant Unit-II in Dera Bassi, Punjab. This facility has also been approved by Japan's ministry of health, Medical Control Council of South Africa and Korean FDA. The stock soared 20.10% to close at Rs23 on the NSE.
Suzlon Energy-owned REpower Systems has concluded contracts with seven communities in Germany's Northern Friesland region to deliver 47 wind turbines. The turbines will have a combined output of 114.83MW and are expected to begin production from 2013 onwards. Suzlon was up 1.33% at Rs41.90 on the NSE.
Money invested under NPS is locked in till the age of 60 under the NPS Tier-I account. Will this change now? The Standing Committee suggests some flexibility, but there is a positive and a negative side to it
The New Pension System (NPS) has not worked very well. While for central government employees, contribution to the scheme is mandatory, the voluntary part of the NPS has not taken off at all. One of the main deterrents is that Tier-I of the NPS does not offer a facility to subscribers to withdraw their funds till they reach 60. Also, the NPS does offer a voluntary Tier-II account where withdrawals can be made.
The Tier-I account is compulsory for government employees and the bulk of the money is kept here, but it is almost impossible for them to withdraw the money in case of emergency expenses for an unforeseen event. This is what deters non-government subscribers from investing in the NPS Tier-I account, where savings would be locked up for about 25-40 years, till retirement.
This issue was taken up by the Parliamentary Standing Committee on Finance which reviewed the Pension Fund Regulatory and Development Authority (PFRDA) Bill, 2011. In its report presented to the Lok Sabha last week, it mentioned that NPS is aimed at providing income security in old age and not to meet periodic or occasional fund requirements during the working life of a person. However, such emergencies cannot be ignored either.
Therefore, the Committee has suggested that in the case of Tier I account, an element of flexibility should be provided to enable subscribers to withdraw money to meet unforeseen, urgent expenses, like a critical illness. For instance, a subscriber can be allowed to take one repayable advance from the accounts after completion of 15 years of service, and permanently withdraw up to 50% of the contribution after completion of a minimum 25 years of service to meet exigencies that should be appropriately listed in the regulations.
This will have two implications. A withdrawal clause would immediately make NPS more attractive for non-government employees. But would it also introduce an element of arbitrariness? India is known for red-tape and corruption. And this could lead to subscribers being forced to run around to secure permission to withdraw from the fund, causing frustration that may compel them to resort to other means to get their claims passed.
The Committee should have suggested a minimum percentage of withdrawal from the fund after a particular period, as is the case for ULIPs, which allow partial withdrawals after 3-5 years. This would have been easier to understand and non-discretionary.
Currently, one can invest through a Tier-II account, from which withdrawals are permitted. But the procedure for this is cumbersome.(Read: The New Pension System needs a comprehensive online facility) The network of Points of Presence (POP) agencies, where a subscriber can make a request for withdrawal, is not very widespread. There is no online facility and the subscriber would have to travel long distances to visit a POP, causing a lot of inconvenience.
The Employees Provident Fund (EPF) unlike the NPS, allows withdrawals in case a member requires to buy a house, repay a loan, fund children's marriage, or pay for medical expenses.
The company is considering challenging the order on the basis of the CCI's classification of DLF as a 'dominant player' in the Gurgaon market, as well the competition watchdog's jurisdiction over the matter
New Delhi: Realty giant DLF may approach the Competition Appellate Tribunal (Compat) next week to challenge a Competition Commission of India (CCI) order to pay a Rs630 crore penalty for abuse of dominant market position, reports PTI.
The company is considering challenging the order on the basis of the CCI's classification of DLF as a 'dominant player' in the relevant market, as well the competition watchdog's jurisdiction over the matter.
In its order dated 16th August, the CCI found the company guilty of abusing its dominant market position and asked it to pay a penalty of Rs630 crore. After the CCI order, DLF had said that it would examine all options, including an appeal before Compat, to contest the penalty.
Sources said DLF is likely to challenge the order next week before Compat, wherein it would also question why the CCI did not serve a show cause notice before passing the order, as was the case with another recent order passed against the National Stock Exchange (NSE).
DLF was found to be market leader based on a third-party analysis of the overall country-wide turnover of companies present in the Gurgaon real estate market.
However, DLF is contending that market position should be determined on the basis of the number of housing units sold in the entire NCR region, after taking into account secondary market housing sales and not just the primary market or units sold directly by developers, sources said.
"There is enough competition in the Gurgaon market in each category of the residential segment. There is no entry ban for any developer and there is no cartelisation," a source said, while asserting that the company did not violate the competition regulations.
To buttress its case of not being a dominant player, DLF is also arguing that it was given only 6% of the total land development licences issued by the government in the Gurgaon region between 2002 and 2009, they added.
DLF had engaged leading property consultant Jones Lang LaSalle to conduct an analysis on its and other players' market share in the NCR region, wherein the company was found to have a market share of only 2.13% in 2007, and then 3.6% in 2008.
DLF's market share rose to 4.8% in 2009, but fell to just 0.4% in 2010-when it was not even among the top-50 developers of NCR region, the report said.
The CCI had passed the order against DLF on a complaint filed by Belaire Owners' Association, a group of buyers at the company's Belaire housing project in Gurgaon.
In May last year, the association complained to CCI that DLF had promised to complete the residential project in 2009, but the buyers were yet to get possession.
Besides, it alleged that DLF "imposed highly arbitrary, unfair and unreasonable conditions on the apartment allottees of the housing complex, which has serious adverse effects and ramifications on the rights of the allottees".
It also alleged that DLF had announced the project before getting necessary conditions and clearances.
However, the company claims to have already compensated the buyers for the delay in form of a higher penalty clause and provide certain additional amenities for the homes without any extra charge.
On the complaints related to the company increasing the number of floors to 29 from 19 originally proposed, the company is contending that the application forms provided for such changes in the project.
Days after its penalty order in the Belaire matter, CCI had also passed a 'cease and desist' order against DLF for the company's Park Palace housing project in Gurgaon.
In the second order, the company was asked to stop formulating and imposing unfair conditions in its agreements with home buyers, but the CCI did not impose any fine in this case.
After this order also, DLF had said it would be "filing an appeal with the Competition Appellate Tribunal shortly, as the company continues to believe that it has a strong case".