Stock Market: A false dawn

Don’t get excited by the moves of FIIs and government

The opening of the markets on Friday 14th September looks like a kind of relief rally to me. With so much negativity around, the government’s decision to hike diesel prices looks good. However, the flip side is where the negativity of the move lies. This is not a move to reduce subsidies but to bring additional income into...

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Sensex, Nifty in a short downtrend: Monday Closing Report

The recent strong uptrend is over and the market is likely to remain in a downtrend, subject to pullbacks for the next few days at least

The market settled lower for the second day in a row on profit booking and weak global cues. On Friday we had mentioned that a close below 5,735 on the Nifty may result in some change in trend. Although the index began above this level today, it witnessed a continuous fall throughout the trading session. The recent uptrend is over for now and a short-term downtrend has set in. The National Stock Exchange saw a volume of 71.19 crore shares and an advance-decline ratio of 618:824.
The Indian market opened marginally higher as the weakness in the Asian pack made investors nervous about the global slowdown and the September quarter earnings season. The Nifty opened five points up at 5,752 and the Sensex started off at 18,969, a gain of 31 points over its previous close.
The opening figures on both benchmarks were their intraday highs as the market soon fell into the negative on profit booking after the rally seen last week. The market continued to drift further southwards as trade progressed on selling pressure in realty and oil & gas sectors.
A weak opening of the key European indices added to the woes, which pushed the barometers deeper into the red. Select buying saw the market make a brief recovery in post-noon trade, however, unabated selling pressure kept a tab on the gains.
The market dropped to its intraday low in the last half hour wherein the Nifty fell to 5,666 and the Sensex retracted to 18,684. 
The benchmarks settled near the lows on profit booking and weak global cues. The Nifty declined 71 points (1.23%) to close at 5,676 and the Sensex tanked 229 points (1.21%) to finish the session at 18,709.
Among the broader markets, the BSE Mid-cap index declined 0.44% and the BSE Small-cap index fell 0.16%. 
BSE Healthcare (up 1.20%) was the lone gainer in the sectoral space. The losers were led by BSE Realty (down 3.50%), BSE Oil & Gas (down 2.77%); BSE Capital Goods (down 2.70%); BSE Consumer Durables (down 1.56%) and BSE IT (down 1.40%).
Eight of the 30 stocks on the Sensex closed in the positive. The major gainers were Sun Pharma (up 3.67%); Bharti Airtel (up 1.62%); Cipla (up 0.87%); Jindal Steel (up 0.87%) and ITC (up 0.65%). The main losers were Reliance Industries (down 4.51%); Hindalco Industries (down 3.52%); BHEL (down 3.44%); Larsen & Toubro (down 3.09%) and State Bank of India (down 2.97%).
The top two A Group gainers on the BSE were—NHPC (up 3.97%) and Sun Pharma (up 3.67%).
The top two A Group losers on the BSE were—DLF (down 7.24%) and United Spirits (down 6.28%).
The top two B Group gainers on the BSE were—Nile (up 19.96%) and Archidply Industries (up 19.91%).
The top two B Group losers on the BSE were—Sheetal Diamonds (down 13.11%) and Globus Corporation (down12.82%).
Out of the 50 stocks listed on the Nifty, 12 stocks settled in the positive. The key gainers were Sun Pharma (up3.73%); Asian Paints (up 2.33%); UltraTech (up1.62%); Bharti Airtel (up 1.56%) and Cairn India (up 1.33%). The major losers were DLF (down 7.46%); Reliance Infrastructure (down 4.82%); RIL (down 4.76%); Hindalco Ind (down 3.96%) and BHEL (down 3.75%).
Markets in Asia closed mostly lower on concerns that the corporate earnings might be impacted on account of the continuing slowdown in the global economy. fresh concerns about Greece and Spain also dented investor sentiments.
The Shanghai Composite, which was closed last week for the Golden Week holiday, settled 0.56% down. Among others, the Hang Seng dropped 0.89%; the Jakarta Composite and the Straits tanked 1% each; the KLSE Composite settled flat with a negative bias; the Seoul Composite declined 0.67% and the Taiwan Weighted settled 0.97% lower. The Japanese market was closed for trade today.
At the time of writing, the key European indices were down between 0.06% and 1.42% ahead of a crucial meeting of European finance ministers to look for ways to ease the region’s debt crisis. At the same time, US stock futures were in the red, indicating a lower opening of US stocks. 
Back home, foreign institutional investors were net buyers of stocks aggregating Rs4,351.99 crore on Friday whereas domestic institutional investors were net sellers of shares totalling Rs189.10 crore.
Kalpataru Power Transmission, engaged in power transmission equipment, has bagged orders worth Rs604 crore, mainly from the Power Grid Corporation of India (PGCIL). The company has received two projects worth Rs571 crore from PGCIL and another order worth Rs33 crore from a private company. The stock gained 1.19% to close at Rs89.65 on the NSE.
Neyveli Lignite Corporation has inked a joint venture agreement with a Uttar Pradesh government undertaking company for setting up a 1,980-MW coal-based thermal power project in the state at an investment of Rs11,128 crore. The Rs11,128 crore project is expected to come up in Ghatampur Tehsil, Kanpur Nagar District, Uttar Pradesh in which NLC will hold majority stake of 51%. The stock advanced 1.17% to settle at Rs86.15 on the NSE.
FMCG firm Dabur India on Monday announced the re-launch of “Thirty Plus” brand with a new formulation. Years after it vanished off the store shelves, India’s first-ever rejuvenator brand is now making a comeback with its new owner Dabur India. The stock declined 0.94% to close at Rs131.65 on the NSE.


RINL IPO to kickstart PSU disinvestment process this month

The Rs2,500-crore IPO of the state-run Rashtriya Ispat Nigam or RINL has been deferred twice since the filing of the draft documents with SEBI

New Delhi: Indian government on Monday said it will kickstart its ambitious Rs30,000 crore disinvestment programme with stake sale in Rashtriya Ispat Nigam Ltd (RINL), this month, reports PTI.


"We have lined up all the cases for the next six months. The first case (RINL) is coming up sometime this month," Finance Minister P Chidambaram told reporters at the Economic Editors' Conference.


The Rs2,500-crore initial public offering (IPO) of the state-run RINL has been deferred twice since the filing of the draft documents with the market regulator Securities and Exchange Board of India (SEBI) on 18th May.


An Empowered Group of Ministers (EGoM) is likely to meet on Tuesday to decide on the date and pricing of the IPO, a source said.


The Cabinet Committee on Economic Affairs in January had approved disinvestment of 10% of the government's 100% stake in the firm.


An official source said that government has identified four more PSUs -- NMDC, NTPC, Power Grid Corporation (PGCIL) and Engineers India (EIL) -- for divesting its minority stake.


"We have floated a paper for inter-ministerial consultation for disinvestment of NMDC, NTPC, EIL and PGCIL and the proposals would soon come up before the Cabinet," the source said.


The Department of Disinvestment (DoD), the nodal point for conducting PSU stake sale, has already got Cabinet approval for stake sale in seven companies, including RINL, Hindustan Copper, Oil India, MMTC, NALCO.


The government plans to raise Rs30,000 crore through disinvestments in 2012-13.


On the budgeted target for disinvestment, Chidambaram said, "I will be quite happy if I can meet the target and complete the timetable (for disinvestment) as laid down.


Because if we do it in the five-and-a-half months that's indeed fast-tracking".


Chidambaram said reforms are required in coal, mining, power, petroleum and natural gas, as well as infrastructure sectors to help create jobs


"There should also be no controversy over reforms in the coal, mining, power, petroleum & natural gas, and infrastructure sectors including roads, railway and shipping.


It is these sectors that are the drivers of growth," he said.


Chidambaram said the first comprehensive Cabinet paper on allowing FDI in retail was prepared by the NDA Government in 2002, in which it acknowledged that FDI in retail was essential to improve the supply chain in agriculture which alone will bring benefits to both producers and consumers.


"That paper also endorsed the argument that FDI in retail will generate millions of jobs. The idea was never rejected.


So, why should there be a controversy when the Government announced its intention to lay down guidelines in order to enable FDI in retail," he questioned.


The Indian government had last month had allowed 51% FDI in multi-brand retail.


Saying that the implementation of FDI is left to the discretion of the states, Chidambaram said, "The controversy over FDI in retail is, in my view, unnecessary and unjustified".


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