As we predicted yesterday, markets were weighed down by global cues. Expect a continuing short-term dip towards a Sensex level of 16,000
The market plunged today after taking a cue from the decline in global bourses. The Sensex ended at 17,380, lower by 310 points (1.7%) and the Nifty ended at 5,215, lower by 93 points (1.7%). There was intense selling pressure on the bourses as the downward rating on Greece and Portugal dragged down indices.
Asian stocks fell on renewed worries over Greece’s debt problems; US stocks were also hit on Tuesday. Key benchmark indices in Hong Kong, China, Japan, South Korea, Singapore, Taiwan and Indonesia were down by 0.26% to 2.57%. US stocks tumbled on Tuesday as downgrades of Greece and Portugal fuelled fear about eurozone economic stability, and a grilling of Goldman Sachs on Capitol Hill heightened the possibility of financial reforms.
The Dow dropped 213 points (1.9%) to 10,992. The S&P 500 slid 28 points (2.3%) to 1,183. The Nasdaq lost 51 points (2%) to 2,471. S&P slashed Greek bonds to junk status and also downgraded Portugal. The downgrade put Greece on par with Romania and below Kazakhstan, Hungary and Iceland. S&P has reduced its rating by two notches to ‘A-minus’ for Portugal citing the weak condition of its finances and its uncompetitive economy. The Federal Reserve is expected to retain the current monetary policy. While there is acceptance on the economic recovery, there will be no revision on the interest rate, to allow the US to grow faster.
Closer home, the UPA government has sailed through the cut motion demanded by Opposition parties against an unpopular hike in fuel and fertiliser prices. The government was backed by 289 MPs in the 545-strong Lok Sabha, while the Opposition managed 201 votes. A more-than-expected income generated from the 3G auction has buoyed investors’ expectation on the curtailing of government borrowing. The Centre is scheduled to borrow Rs2.87 trillion ($64.3 billion) during the first half of the fiscal year out of a total Rs4.57 trillion rupees for the full year.
Foreign institutional investors were net sellers of Rs164 crore. Domestic intuitional investors bought stocks worth Rs1 crore. The rupee was down on the declining equity markets and the gain in the dollar.
Sintex Industries (down 1.5%) has touched its 52-week high on the news of a stock-split plan. Maruti Suzuki India (down 1%) is in discussion with Volkswagen AG to supply certain models. UltraTech Cement (down 1.8%) is reportedly set to acquire a 51% stake in Dubai-based Star Cement Co for an undisclosed sum. Patni Computer Systems (down 0.4%) has received an order from US health insurance provider Universal American Corp. Patni will also acquire CHCS Services Inc, a back-office unit of Universal American in Pensacola, Florida, with 200 employees. GVK Power & Infrastructure’s (down 3%) wholly-owned subsidiary GVK Coal (Tokisud) Company has signed the financing documents for the Tokisud North Sub-Block coalmine in South Karanpura coalfield situated in district Hazaribagh, Jharkhand. NTPC (down 0.1%) has signed an agreement with the Nuclear Power Corporation of India to set up a joint venture company for building nuclear power projects in India. The new entity will be a subsidiary of Nuclear Power Corporation, which will hold a 51% stake, with NTPC holding the remainder. Container Corporation of India posted a growth of 13% in sales in the March quarter over the year-ago period. However, its operating profit declined 3% for the same period.
The government will pay a broker commission of 0.35% for selling shares to retail investors and 0.15% for roping in high net-worth individuals
The government today said that it will pay a commission to brokers selling public offers of State-run firms, in an attempt to woo retail investors for its ambitious disinvestment programme, reports PTI.
The government, which till now paid little or no commission to brokers, has fixed a commission of 0.35% for selling shares to retail investors and 0.15% for roping in high net-worth individuals.
“After consulting with brokers we have done the changes and the commission for brokers have been fixed at 0.35% for retail investors and 0.15% for HNIs,” disinvestment secretary Sumit Bose told reporters.
The changes have been done to attract more retail demand for the public offers, he said.
Earlier, the commission paid was included in the fees of the book-running lead managers (BRLMs). “Now the government will reimburse this commission to the BRLMs for the brokers,” he added.
The new provisions will be applicable to all the forthcoming public issues starting with State-run power producer Satluj Jal Vidyut Nigam. SJVNL’s public issue opens tomorrow.
“The new norm will be applicable to all subsequent issues, starting with SJVNL,” Mr Bose said.
The government is selling 10% of its equity in SJVNL through an initial public offering (IPO). The price band has been fixed at Rs23-Rs26 per share.
The government has set a target of Rs40,000 crore through disinvestment in the current fiscal.
A total of 123 projects currently under implementation have also been delayed due to problems in land acquisition, shifting of utilities, non-availability of environmental, forest and railway clearances and legal disputes
Around 75% of the projects completed by the National Highways Authority of India (NHAI) so far were delayed due to various reasons, including land acquisition problems, Parliament was informed today.
In a written reply to a question in the Rajya Sabha, minister of state for road transport and highways RPN Singh said that out of 230 projects completed by the NHAI so far, a total of 172, or 74.8% of the projects were delayed.
“A total of 123 projects currently under implementation are also delayed,” the minister said, adding that projects were mainly delayed due to problems in land acquisition, shifting of utilities, non-availability of environmental, forest and railway clearances and legal disputes.
Regarding cost overruns due to the delay in implementation of these projects, he said that the contracts, awarded on an Engineering, Procurement and Construction basis, had provisions for variation and cost escalation in case of delays beyond the control of the contractors.