Share prices will continue to remain weak: Monday Closing Report

A couple of days of strength may be misleading

The domestic market opened in positive territory on support from its Asian peers, which were in the green in morning trade. The Sensex opened 106 points higher at 17,985 and the Nifty was up 35 points at 5,409, this morning. The indices were pushed into the red as investors resorted to profit booking early in the day. However, the damage was limited and the market turned positive in late morning trade on support from healthcare, auto and fast moving consumer goods stocks.

The indices touched the day's high in noon trade with the Sensex breaching the 18,000 levels and the Nifty touching 5,409. But the market could not sustain those levels and pared some gains. Continuing to trade sideways, the market dipped into the red again in the last half hour and closed lower for the third day in a row. The Sensex settled 40 points lower at 17,839 and the Nifty closed at 5,365, down nine points. The advance-decline ratio on the National Stock Exchange was 618:1051. The market may end directionless in the absence of domestic triggers.

In line with the key benchmarks, the broader indices also ended almost flat. The BSE Mid-cap index fell 0.27% and the BSE Small-cap index declined 0.29%.

In the sectoral space, BSE Healthcare (up 0.15%), BSE Bankex (up 0.04%) and BSE Fast Moving Consumer Goods (up 0.01%) were the gainers, whereas BSE Realty (down 0.92%), BSE IT (down 0.73%) and BSE TECk (down 0.63%) were the top gainers.

Jindal Steel (up 1.95%), Mahindra & Mahindra (up 1.39%), Sterlite Industries (up 1.07%), HDFC (up 0.92%) and Tata Steel (up 0.87%) were the top performers on the Sensex, whereas Hindalco Industries (down 3.12%), Hero Honda (down 2.74%), Maruti Suzuki (down 2.33%), Cipla (down 2.11%) and Wipro (down 1.90%) ended at the bottom of the index.

In order to boost manufacturing of indigenous equipment, the Centre may extend preferential status to 'Made in India' products in the New Telecom Policy 2011 (NTP'11). Department of Telecom (DoT) secretary R Chandrashekhar said the DoT is waiting for recommendations from the Telecom Regulatory Authority of India (TRAI) on manufacturing and expects to receive them by end of March.

The decision to encourage telecom manufacturing is in line with the recommendations made in the IT Task Force report, which is being processed by the Department of Information Technology.

Markets in Asia closed with smart gains on Monday, on positive news emanating from quake-hit Japan. Reports indicated that workers are close to restoring power supply to the damaged nuclear plants. Chinese investors also chose to ignore the rate hike initiated by the country's central bank after the markets closed on Friday. Higher oil prices, on the back of the continuing turmoil in West Asia, boosted crude refining companies.

The Shanghai Composite added 0.10%, the Hang Seng jumped 1.73%, the Jakarta Composite gained 0.71%, the KLSE Composite rose 0.33%, the Straits Times surged 1.63%, the Seoul Composite advanced 1.13% and the Taiwan Weighted was 0.87% higher today. The Japanese market was closed for a local holiday.

Back home, foreign institutional investors were net sellers of equities worth Rs523.51 crore on Friday. On the other hand, domestic institutional investors pumped in funds worth Rs296.30 crore in the equities segment on the same day.

Monnet Global (MGL), a wholly owned subsidiary of Monnet Ispat and Energy (down 0.88%), has acquired a 100 million tonne Indonesian coal company, PT Sarwa Sembada Karya Bumi, for $24 million.

"The acquisition gives MGL access to one of the largest thermal coal mines spread over an area of 25,000 hectares. Presently, only 1,500 hectares of the area has been explored and the company has been able to establish 65 million tonne of coal reserves in the mines. It expects these reserves to go up substantially after completing exploration of the whole area," the company said.

Voltas (down 1.78%) has decided to form a joint venture (JV) with German-based Linde Material Handling GmbH (LMH), a part of KION Group, for materials handling business. On completion of the deal, Linde's material handling operations would be transferred to a JV company, where LMH would hold a majority shareholding.

Voltas would also enter into a supply agreement with the JVC for forklifts to be manufactured at its Thane plant (in Maharashtra) and grant license for use of 'Voltas' brand for forklifts for a period of five years, on certain conditions.

Madhucon Projects (up 3.67%) has received a letter of award from National Highway Authority of India (NHAI) for four-laning of the Ranchi-Rargaon-Jamshedpur section of NH-33 in the state of Jharkhand under NHDP Phase-III for design, build, finance, operate and transfer (DBFOT) on a semi-annual annuity of Rs133.20 crore. The concession period is 15 years, including the construction period of 912 days.


Widening gap between FDI, FII inflows causing concern

While FIIs invested $31.03 billion during April 2010-January 2011, India received FDI of $17.08 billion during the same period, showing a gap of about 45% between the two

New Delhi: With a slowdown in foreign direct investment (FDI) by 25%, India's dependence on foreign institutional investment (FII) inflows, considered as hot money for maintaining its current account, has increased this fiscal, reports PTI.

Moreover, the gap between FDI and the inflows from FIIs mainly in the stock market has grown to $14 billion in 2010-11, according to the latest official data.

While FIIs invested $31.03 billion during April 2010-January 2011, India received FDI of $17.08 billion during the same period, showing a gap of about 45% between the two.

In 2009-10, the difference between FII and FDI was only $1.9 billion.

However, in the previous years of 2007-08 and 2008-09, FDI inflows were way ahead of the money coming through the share market.

Although the country's current account deficit (CAD) has been kept under check due to large capital flows coming through the FII route, the quality of the inflow remains an issue.

In its mid-quarterly policy review, the Reserve Bank of India (RBI) had estimated the CAD for 2010-11 at around 2.5% of the country's Gross Domestic Product (GDP).

"...It is necessary to focus on the quality of capital inflows with greater emphasis on attracting long-term components, including FDI, so as to enhance the sustainability of the balance of payments (BoP) over the medium-term," RBI had said while expressing concerns on the decline in FDI.

The drop in FDI inflows to $17.08 billion during the ten months of the current fiscal from $22.96 trillion in the corresponding period (April-January) of the previous financial year is attributed to the financial troubles in several European economies.

Germany, France, the Netherlands and UK are the main investors in India.


BNP Paribas Mutual Fund appoints Anand Shah as CIO

Anand Shah is an alumnus of Indian Institute of Management, Lucknow and an engineer from Regional Engineering College, Surat

BNP Paribas Mutual Fund has appointed Anand Shah as its chief investment officer (CIO). In this role, Mr Shah will be responsible for leading a team of investment professionals managing a wide range of funds across asset classes. Mr Shah joins from Canara Robeco Mutual Fund, where he was head-equities.

Announcing this key appointment, Nikhil Johri, managing director, BNP Paribas Asset Management, India said, "I am delighted to welcome Anand to our team. With over 10 years of investment management experience and a successful performance track record in his previous roles, we are sure that Anand's expertise will help us add value to the investment process and performance for the benefit of our investors." Mr Shah is an alumnus of Indian Institute of Management, Lucknow and an engineer from Regional Engineering College, Surat.

BNP Paribas Mutual Fund is part of the global network of BNP Paribas Investment Partners - one of the world's leading asset managers and backed by the financial strength of BNP Paribas, among the six most solid1 banks in the world.


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