There are no signs of buyers. Nifty may hit 4,800
The US rating downgrade over the previous weekend raised the fear of a repeat of the recession in the world's largest economy that put pressure on global markets. The ever-widening debt problems in Eurozone countries and a mixed bag of corporate results and economic indicators on the domestic front caused a 3% loss on the market this week, the third successive weekly drop.
Credit rating agency S&P downgraded the credit rating of the US from 'AAA' to 'AA+' on 5th August, which sparked concerns over growth of the economy and investors shied away from equities and took refuge in gold. Concerns that the debt crisis may engulf more European nations added to the worries.
The market suffered a deep cut on Monday, following the US rating cut. The indices recovered nearly half the losses the following day, although they closed in the red for a sixth consecutive day. Positive comments from the US Federal Reserve boosted sentiment, and helped the market snap a losing streak to close with gains on Wednesday. However, the market could not sustain the gains and closed lower on the last two days of the week.
Overall, the Sensex declined 466 points to 16,840 and the Nifty settled 138 points down at 5,073. The market could see a sharp fall if the Nifty breaks the support of 5,050. However, an upmove to 5,200 is possible if the support holds.
The BSE Auto index was the lone sectoral gainer (up 3%), while the BSE Consumer Durables index settled flat. BSE IT (down 8%) and BSE TECk (down 7%) were the top sectoral losers in the week.
Mahindra & Mahindra (up 13%), Hero MotoCorp (up 6%), Maruti Suzuki (up 5%), Bajaj Auto (up 4%) and NTPC (up 2%) were the major gainers on the Sensex. The top laggards were Tata Power (down 12%), Tata Steel (down 11%), TCS, Tata Motors (down 10% each) and Infosys (down 8%).
M&M (up 13%), Hero MotoCorp, Ambuja Cements (up 6% each), Maruti Suzuki (up 5%) and Kotak Mahindra Bank (up 4%) were the major Nifty gainers, while Tata Power, Reliance Power (down 12% each), Reliance Capital, Tata Steel (down 11% each) and TCS (down 10%) were the top losers on the index.
Industrial growth, as measured by the Index of Industrial Production (IIP), revived moderately to 8.8% in June 2011 on a smart recovery in the manufacturing and capital goods sectors. Growth in factory output stood at 7.4% in June last year. During the first quarter (April-June) of the current fiscal, IIP growth stood at 6.8%, as against 9.6% in the corresponding three-month period last year.
Food inflation jumped to a four-and-a-half month high of 9.9% during the week ended 30th July, from 8.04% in the previous week. This is the highest rate of price rise in food items since the week ended 12th March, when food inflation stood at 10.05%.
India's exports jumped by a record 81.8% year-on-year to $29.3 billion in July 2011 due to the sterling performance of sectors like engineering, petrochemical products and gems and jewellery. Imports, too, increased by 51.5% to $40.4 billion, resulting in a trade deficit of $11.1 billion. However, this high growth rate is unlikely to be sustained in the coming months due to uncertainty in the US and European economies, commerce secretary Rahul Khullar said.
On the global front, speculation that France could be the next target of rating agencies worsened the worries. But the French finance ministry 'formally' denied rumours that the country was heading for a downgrade of its prized 'AAA' credit rating.
Noted media man Paranjoy Guha Thakurta screens documentary on destructive illegal mining in Bellary at a programme hosted by Moneylife Foundation together with Awaaz Foundation
Independent journalist Paranjoy Guha Thakurta on Friday said that the mainstream media must do more to highlight the destructive illegal mining in the Bellary region of southern India's Karnataka state which has caused a much bigger loss to the country than even the 2G spectrum and licence scam.
"Unlike in the 2G spectrum allocation scam where the loss is notional, the loss due to illegal mining is actual and much bigger," he said. Mr Thakurta, who is a writer, educator, interviewer and commentator, pointed out that about two-third of the resources (iron ore) mined had gone out of the country and was therefore no recoverable.
Mr Thakurta was speaking at a special screening of his documentary film "Blood and Iron", about the destructive illegal mining in the Bellary region, for an interested gathering in Mumbai. The programme was organised at the KR Cama Hall by Moneylife Foundation together with Awaaz Foundation. The film which was made over the past year has been updated with the Supreme Court's latest order banning mining in Bellary and the resignation of BS Yeddyurappa as chief minister a fortnight ago.
The 96-minutes long film documents a story of greed and devastation, that has ravaged the region across Karnataka and adjoining Andhra Pradesh, through interviews with a range of individuals from a cross-section of society.
It talks about how exports from Bellary have enriched a privileged few, while the ordinary people are trying to eke out a living in the area, and how iron ore mining-much of it illegal-has resulted in large sections of the people living in abject poverty.
The documentary mentions the infamous Reddy brothers who were ministers in the Yeddyurappa government and have so far been untouched despite high-ranking authorities naming them for being involved in this illegal activity.
Post the screening of the film, a member of the audience referred to the ecological damage due to mining across the country saying there is a need for people to participate in the fight against this. Mr Thakurta agreed with the sentiment and said, "I have documented all the facts and presented it in my personal capacity."
To a question about the production of the film, he said the team that made the film had to be extremely cautious during the entire filming and he thanked the local people of the region for their support and their help. "We used the 'shoot and scoot' method. We never stayed at a hotel for more than a night. The film is also a result of the huge support from the local people, who gave in-depth inputs and analysis."
Another question was about the quantum of loss due to the illegal mining. Mr Thakurta said "the Justice Santosh Hegde report estimated that Rs16,000 crore has been lost. This figure is based on evidence available. But the loss could be much more as evidence for many other things may not be available."
On the matter of illegal mining and land laws, Mr Thakurta said that "even without the (Mining) Act, if the actual law is applied and followed, there would not be such a situation in Bellary and elsewhere."
Such illegal mining is active in Goa as well, but very little is reported about this in the media. "If I get enough resources, I would like to make a documentary showing two sides of Goa. One side is the 'tourist destination Goa' while the other is of the country side which has been devastated due to illegal mining," Mr Thakurta said.
The CCI had felt that NSE should levy a charge and we are abiding by that suggestion, an NSE official said, but asserted that the exchange would still challenge the CCI order
New Delhi: Within two months of the Competition Commission of India (CCI) holding it guilty of abusing its dominant market position with subsidised and unfair pricing, the National Stock Exchange (NSE) on Friday said it will start levying charges for currency derivatives trading from 22nd August, reports PTI.
However, NSE would still challenge the CCI order, which on 23 June 2010 imposed a Rs55.5 crore fine on the country's largest bourse for abusing its dominant market position and asked it to stop unfair pricing practices.
In its order passed pursuant to an inquiry after a complaint filed by rival exchange MCX Stock Exchange (MCX-SX), CCI said NSE's move towards subsidising its services was at the cost of rivals.
"This is a very positive development for the currency derivatives market and would encourage healthy competition. We welcome this move by NSE to implement the decision of CCI," Joseph Massey, MD and CEO, MCX-SX said.
MCX-SX has been saying that it was not being able to levy a charge despite suffering huge business losses, as NSE was not charging for the product.
Sources said that MCX-SX would soon decide on its transaction charges, while no immediate comments could be obtained from United Stock Exchange-the third player present in this market.
NSE said it had earlier waived the charges for the benefit of the market and the consumers, and all market players-including exchanges, members and consumers have benefited from the move.
While NSE would be challenging the CCI order, it decided to levy the charge out of respect for the commission. The CCI had felt that NSE should levy a charge and we are abiding by that suggestion, an NSE official said, but asserted that the exchange would still challenge the CCI order.
The NSE commenced currency derivatives trading on 29 August 2009, becoming the first bourse to offer this product. However, it has not levied any charge for this till now.
Trading in currency futures segment has seen a rapid growth ever since its launch and the daily average trading volume has crossed Rs18,000 crore, from a turnover of Rs291 crore in the first day of trading on 29 August 2009.
NSE said it has decided to levy the transaction charges "in deference to the order of the Competition Commission of India against NSE and without prejudice to the rights and contentions of the Exchange in the matter."
Besides transaction charges based on total turnover value, of up to Rs1.15 per lakh in currency futures and of up to Rs40 per lakh in options market, NSE has also asked its members to contribute for its Investor Protection Fund Trust.
NSE would levy an advance transaction charge of Rs50,000 per member per annum and would charge admission fee of Rs1 lakh for its existing members and Rs5 lakh for others.