If the Nifty lows of last week hold, we could see an upside of 5,000
Continuing worries about a likely recession in the US and the debt crisis in Europe led global markets down this week. The developments had investors back home worried about the profitability of Indian companies in the coming quarters and Morgan Stanley's downward revision of the growth forecast for India worsened sentiment, resulting in the market tumbling 4% in the holiday-shortened week.
Political developments in Delhi following the arrest of anti-corruption crusader Anna Hazare led the market lower on Tuesday. The market ended with modest gains on Wednesday. But the gains were short-lived, as the market continued to decline over the next two days. The Sensex lost 698 points through the week to close at 16,142 and the Nifty fell 227 points to 4,846.
After a loss of a day or two, we can expect a bounce-back. The Nifty is likely to find support at 4,785 and then at 4,700. The resistance would be at 5,000.
While the BSE Fast Moving Consumer Goods index settled flat this week, all other sectoral gauges registered losses. BSE Bankex (down 8%) and BSE Realty (down 7%) suffered the most.
Hero MotoCorp (up 5%) and Coal India (up 2%) were the only gainers on the Sensex during the week. The laggards were led by ICICI Bank, Tata Motors (down 11% each), Hindalco Industries, Jindal Steel & Power (down 8% each) and State Bank of India (down 7%).
The leaders on the Nifty were Hero MotoCorp (up 5%), Ambuja Cements and ITC (up 1% each). Reliance Communications, Reliance Infrastructure, Axis Bank (down 12% each), ICICI Bank and Reliance Capital (down 11% each) were the top losers in the index.
Headline inflation declined from 9.44% in June to 9.22% in July, the lowest in eight months. Although inflation has shown signs of moderation, the Reserve Bank of India (RBI) is unlikely to change its monetary tightening measures as rate of price rise is still at intolerable levels.
Food inflation too was lower at 9.03% for the week ended 6th August from 9.90% in the previous week. Food inflation which was in double-digits for most of 2010, showed signs of moderation in March, before rising again to a four-and-a-half month high of 9.90% end-July.
Morgan Stanley has reduced its GDP forecast for the current fiscal from 7.8% to 7.4% and for the year ending 31 March 2013 from 8% to 7.6%. This week, the global brokerage firm also lowered its year-end target for the Bombay Stock Exchange benchmark Sensex by 15% to 18,850, saying that oil prices, inflation, high rates, slowing growth and the spate of corruption scandals were some of the factors that could affect the performance of the market.
With the domestic auto market on a slide, Tata Motors and Maruti Suzuki have cut production. The automobile industry is bracing itself for possible single-digit sales growth this fiscal.
In July, domestic passenger car sales fell for the first time, after 30 months of growth, registering a 15.76% decline. This is attributed to the steep hike in lending rates as well as higher fuel prices. In contrast, autos recorded a phenomenal 29.72% growth at 19,82,702 units last fiscal.
Still, car makers are hoping that a slew of new launches, among these Maruti Suzuki's Swift, Honda's new Jazz and Brio, Volkswagen's Jetta, and the recently-introduced Beat diesel by General Motors India will help revive the market.
As the markets slipped for a fourth consecutive week, finance minister Pranab Mukherjee on Friday said that this was not the right time to sell government stake in state-owned companies. The government had originally planned to mop up Rs40,000 crore from stake sales in various public sector units.
"We cannot sell our valuable assets in a market situation where we will not get the adequate prices," Mr Mukherjee said. He said that the whole objective was to discover the latent price which is not known.
Bipasha Basu (on twitter): A big cheer for Dabbawalas for supporting Anna! And more power to Anna!
A note on Wall Street Journal on the action by Dabbawalas:
Shekhar Kapur: This is not just about the Lokpal Bill. It's about the people of India sending a clear message that they are taking their destiny into their own hands.
Video of protests in Hubli:
Arvind Kejriwal: 15-day fast may go beyond the period
New Delhi: Team Anna Hazare on Friday said the 15-day fast for a strong Lokpal Bill may go beyond the period depending upon the government's response to the agitation. Hazare's associate and RTI activist Arvind Kejriwal said the 74-year-old Gandhian was actually planning a longer programme for the protest fast but there was a legal problem.
Kejriwal said Hazare's health was fine and was not a matter of concern.
Asked if statements coming out that Hazare's fast is indefinite and not a fast-unto-death was a climbdown, Kejriwal said, "There is no climbdown. Anna Hazare never used the word fast-unto-death. It is an indefinite fast. Anna used the word indefinite because it is more spiritual. Fast-unto-death seems a little more in the connotation of blackmail."
Replying to a question about the possibility of certain organisations and individuals in the movement becoming violent, he said, "You have seen the movement so far remaining non-violent. This shows the spirituality of the entire movement."
Short rallies in DLF Cyber City, Gurgaon, in support of Anna Hazare
Anna Hazare fever spreads to Hong Kong, Singapore; expat Indians join protests
BEIJING: The Anna Hazare fever has spread to Hong Kong and Singapore with expatriate Indians holding relay fasts, meetings and demonstrations. More demonstrations and a drive to raise funds for the movement back home have been planned over the weekend.
Volunteers posted at the entry gates of subway stations in Hong Kong are distributing a two-paper leaflets explaining why it was necessary for Indians living abroad to express their support for the anti-corruption movement and comparing the official and the Anna Hazare versions of the Lokpal Bill.
"We are telling people we should share the pain felt in India over issues like corruption. Sharing the nationality is not enough," said Dilip Pandey, a Hong Kong-based IT expert, who played a key role in organising a meeting attended by 80 local Indians last Sunday. Pandey, his wife and another local Indian have been on relay fast for the past two days.
Another meeting is scheduled for the coming Sunday when Pandey and his friends expect a larger turnout. Plans include launching a fund-raising drive to send donations for the Jan Lokpal movement in India. They also plan to collect signatures of the attendees on a memorandum to be submitted to the Indian Consulate in Hong Kong.
"We also want to approach the United Nations saying that the main principals in the UN Convention against corruption have not been implemented in India," Pandey said.
A group of Indians based in Singapore has approached the local police for permission to hold a meeting at the Speaker's Corner, a place designated by the government for the purpose of holding protests. They are also implementing a signature drive in order to submit a memorandum to the Indian High Commissioner demanding implementation of the Jan Lokpal Bill.
"We are expecting the permission to come through soon. We have provided the police with details about the nature of our demonstration including the banners we will be carrying and protest T-shirts to be worn by us," Aashis Sharma, a financial consultant organising Indians in Singapore, said.
Singapore is holding its presidential election on Saturday. Sharma expects the police to give him permission to hold the meeting on another day. "There is a huge amount of interest from Indian citizens involved in a wide range of professions in Singapore," he said. He expects at least 700 people to turn up at the forthcoming meeting.
Indians in Hong Kong were early starters submitted a memorandum to the local Indian Counsel-General on April 9 and holding a bicycle rally with volunteers wearing T-shirts carrying the "India Against Corruption" logo on April 16. Two local Indians, Sailesh Saraf and Ajay Sharma have already gone to India to join the Anna Hazare movement.
Anand Mahindra (on twitter): Comforting that media-savvy young India's image of an iconic leader is not a photogenic & Clintonesque character but a simple septuagenarian.
Kiran Bedi (on twitter): Just been informed that nine opposition political parties have asked government to withdraw their Lokpal Bill and table an effective one.
CVC accuses Ramnath Pradeep of violation of bank norms to favour some corporate houses in disbursal of loans and of granting undue favours. Asks finance ministry to seek explanation and take appropriate action
The Central Vigilance Commission (CVC) has indicted Ramnath Pradeep, chairman and managing director of Corporation Bank, on a series of charges of corruption and abuse of authority to favour some corporate houses.
The CVC has said in a report that Mr Pradeep abused his authority and power by deliberately favouring some corporate houses in sanctioning big-ticket loans, despite them being in default of loans from other state-owned banks. He has also been charged with altering the bank's decision-making process for sanctioning advances to certain parties and granting undue favours in awarding consultancy, retainer ship as well as outsourcing of ATM activities.
According to a newspaper report, Mr Pradeep has been charged with eight offences, four of which concern irregularities in extending advances and the others are related to other issues such as management decisions.
The CVC has submitted its report to the department of financial services (DFS) in the Union Ministry of Finance, advising it to seek an explanation from Mr Pradeep on the "lapses noticed by the inquiry officer." It has asked the ministry to the report back to the CVC with its comments. The Commission has recommended that "appropriate measures may be taken by the department (DFS) to restrain the CMD from further abuse of authority."
According to sources, the vigilance commission has addressed the report to the ministry directly to ensure that it reaches on time in view of the seriousness of the charges and that Mr Pradeep is to retire from service on 30 September 2011.
Strangely, information sought under the Right to Information Act reveals that the report was received by the ministry after a delay of 26 days.
In its reply to an RTI query, the CVC said that the report was submitted by the inquiry officer on 9 June 2011 and that it was sent to the secretary of the DFS on 30 June 2011 to obtain the explanation of the CMD. It also said that the report was forwarded to the Central Bureau of Investigation (CBI) for further investigation and verification.
The Ministry of Finance in its reply to an RTI query said that it had received the "Direct Inquiry Report" of the CVC on 27 July 2011. It also said that, "The same (report) is being examined in this Department. No deadline has been fixed for completing the action in the matter."
According to a whistleblower, "DFS has sought the CMD's explanation on the report through a letter dated 1st August advising him to submit it at the earliest, without giving any timeframe. This indicates that the ministry is soft-pedalling the matter."
Meanwhile, Mr Pradeep has been quoted in the Mint business daily as saying that, "Some people in the bank had moved the CVC against me. I am preparing a reply to these charges. I have done everything as per the rules, there are no issues."