Thursday’s Market Preview: Global cues indicate a positive opening

The domestic market is likely to witness a positive opening on strong global cues. Wall Street ended higher in the pre-holiday session as economic data signalled an improvement in the economy. But volatile trading can be expected on account of the expiry of the November futures and options (F&O) contract today. Markets in Asia were mostly in the green on positive economic indicators emanating from the US. However, fears of China implementing additional policy tightening steps still remain. The SGX Nifty was 15 points higher at 5,875 compared to its Wednesday’s close of 5,860.

The market opened higher on Wednesday brushing aside concerns about tensions in the Korean peninsula and the global economy. Jittery trade saw the indices dipping into the red for a brief period in morning trade. They soon bounced back to touch the day's highs but range-bound trading led to a sharp decline towards the close. The decline was triggered by the CBI raids on LIC Housing Finance and some banks. Finally, the Sensex closed 231.99 points (1.18%) lower at 19,460. The Nifty was down 69 points or 1.16% at 5,865.

The US markets closed with smart gains overnight, ahead of the Thanksgiving Day holiday, on positive economic data a sign of an improvement in the economy. The Reuters/University of Michigan consumer sentiment index rose to 71.6 in November, up from 67.7 last month, beating analysts’ expectations. The Labor Department’s data revealed that the number of US workers filing new claims for jobless benefits fell by 34,000 to 407,000 in the week ended 20th November, to the lowest level since July 2008. Besides, personal income grew at a faster pace than they have for much of the year and consumer spending expanded. On the flip side, orders for durable goods decreased 2.7% in October; the steepest decline in nearly two years, and new home sales fell for the fourth time in the last six months. The US market will be closed tonight for the Thanksgiving Day holiday.

The Dow surged 150.91 points (1.37%) to 11,187. The S&P 500 gained 17.62 points (1.49%) to 1,198. The Nasdaq gained 48.17 points (1.93%) to 2,543.

The Asian pack was mostly higher in early trade today on the back of strong economic data originating from the US, a positive sign for exporters in the region. Commodity related stocks surged on a rise in crude and metal prices.

The Shanghai Composite surged 0.59%, the Hang Seng gained 0.52%, the Jakarta Composite jumped 1.07%, the KLSE Composite was up 0.56%, the Nikkei 225 rose 0.36%, the Straits Times advanced 0.58% and the Taiwan Weighted rose 0.59%. On the other hand, the Seoul Composite was down 0.12% on account of the tension between the two Koreas. The SGX Nifty was 15 points higher at 5,875 compared to its Wednesday’s close of 5,860.

Back home, the government on Wednesday said the housing finance racket unearthed by the Central Bureau of Investigation (CBI), leading to the arrest of the CEO of LIC Housing finance and some senior officials of public sector banks, is a bribery case involving some individuals and not a large-scale scam.

After all the hype about the much-talked third generation (3G) services, a survey by The Nielsen Company revealed that only one out of five urban mobile subscribers in India is expected to opt for 3G services initially, despite its high popularity among people.
 
Despite high degree of awareness about 3G mobile services and its capability to deliver high speed internet, it may take as long as 8-10 years before a majority of mobile users are on a 3G plan, said a study by the company.

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Bihar: A lesson in development that Congress and BJP may have failed to understand

Development might have triumphed over petty caste politics in what was once a ‘backward’ state, but has the ruling party at the Centre and the NDA-led opposition learnt the right lesson?

The sweeping re-election of Bihar chief minister Nitish Kumar’s coalition government is a solid confirmation of the development he has worked to bring about in the hitherto poorly-governed, deeply caste-ridden state. The election verdict in what was once considered the poorest state in the country, will most likely reverberate across the states, ringing the warning bell for both the ruling Congress party at the Centre and the Bharatiya Janata Party (BJP), the main national opposition and the principal partner in Mr Kumar’s government.

 “This is a victory of the people of Bihar,” the chief minister declared in a victory speech on national television. “The mandate is to move forward. The people of Bihar have decided not to go back to the old, dark days. I promise that I will work hard for five years and try to do more. This is a victory for development.”
 
The two-month long campaign was watched closely for the old divisive caste politics that has dominated much of northern India, and kept large sections of the population in large states like Bihar and Uttar Pradesh backward for more than two decades.
 
It’s worth recalling a description in The Economist five years ago, when the previous government of Lalu Prasad Yadav and his wife Rabri Devi was voted out after 15 years in office. “Bihar (had) become a byword for the worst of India, of widespread and inescapable poverty, of corrupt politicians indistinguishable from mafia-dons they patronise, caste-ridden social order that has retained the worst feudal cruelties.”
 
Nitish Kumar may not have totally ignored caste, but his campaign focused on his efforts to improve the lot of the roughly 90 million people of the state. During his five years in office, the chief minister tightened governance by fighting crime and corruption, and took serious steps to revive long-neglected development through investments in education, healthcare and infrastructure.
 
The BBC appreciated the progress in a recent report titled “Where ‘backward’ Bihar leads India”, which said that the state has also made strides in the areas of women’s empowerment, judicial and tax reforms, and public safety. Between 2003 and 2008, even the inflow of foreign tourists in Bihar rose nearly six-fold from 61,000 to 3,46,000.
 
The measures have helped to turn the state’s economy around. According to information available, Bihar’s economy grew an average 11.35% each year between 2004 and 2009, compared with 3.5% in the prior five years and well above the national growth average. The figures are reflected in the election result.
 
This evening, election authorities reported that the Janata Dal (United)-Bharatiya Janata Party coalition appeared likely to win nearly 200 of the total 243 seats in Bihar’s legislative assembly, a huge jump from its previous 143 seats.
 
The result will be a big setback for the Congress party which is trying to rebuild in the northern states. Its leaders made a bold effort to increase the nine seats it had, but it appears that they may have lost a few instead. Clearly they didn’t get it—they criticised the chief minister without gauging the impact of the changes he has been able to make.
 
Already, the Congress party is embroiled in the 2G spectrum allocation scam of historic proportion, it is finding very difficult to get out of. The party rules in several states, where some of its governments are bogged down with leadership squabbles and major corruption cases, while others don’t have much of a record to boast about. Today, the chief minister of the Congress government in Andhra Pradesh said he was resigning for health reasons
 
It’s not a very different story for the BJP. It can boast of the progress made by its poster boy Narendra Modi in Gujarat, but it has little else to show. The result in Bihar, where it is in a coalition, may boost the party’s confidence, but it doesn’t seem to have taken the lesson from the verdict. Today, the party’s leadership decided to retain its chief minister in Karnataka, BS Yeddyurappa, who has been battling a challenge to his leadership amidst a series of land scams.
 
The next parliamentary election is only in 2014. But the Bihar result is a clear verdict against the policies of caste and corruption that the Congress, BJP and other political parties will be sorry not to learn from.

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COMMENTS

JP

9 months ago

Thanks a lot ......I m thankful that I have seen this post otherwise I m going to join ebiZ , they told me that by leaning their courses and their investment process I will become the richest person. ....thanks to God he give me right way .....and a BiGgg thanks whom making this article

B V KRISHNAN

7 years ago

Nobody in India cares for caste. It is the wily politician who manufactures divisions on caste grounds, to ensure votes. These politicians are so starved of ideas that they use the easiest trick to get votes. It is rarely that somebody like Nitish Kumar rises above such methods. Also, media should also share the blame - they are double quick to label every activity on caste grounds. They publish which caste got how many berth in each ministry! Watch for the same comments from media when Nitish forms his ministry.

ss

7 years ago

Wow...truly unbelievable. Despite winning 90% of seats contested, BJP has received "warning bell" from the masses. And BJP with 91 seats seems to be comparable to Congress with 4 seats.

I suggest you check into a mental asylum and get treatment

REPLY

Ajeya Sadashivaiah

In Reply to ss 7 years ago

Comparing numbers will not make sense, the charm of Nitish Kumar has given a life to BJP in Bihar. This doesn't mean BJP is doing good. In Karnataka BJP CM did huge amount of corruption and nepotism, it has crossed all the limits. Still BJP central committee failed to put B.S Yeddyurappa out. This shows the how powerless the top BJP leaders are even on there own state leaders. If you see meticulously RSS itself corrupted in Karnataka.

V Malik

7 years ago

There is also less low level visible corruption in Bihar, when compared to some of the "better" states, like Maharashtra for example. State and National highways are still mostly un-tolled, while it is an open racket in MH. There is no "octroi" and "jakat naka" menace. Bijlee/paani, as it gets available, is cheaper. Basic victuals like milk/cereals/veggies and other similar are far cheaper, and also available at small co-ops. The farmer has it much easier getting his produce to the consumer. And there is far more political awareness of the get your dues from your local neta, grassroots onwards, in most parts of Bihar.

Dhananjay

7 years ago

Delisional is the word for your analysis.

What Chief Minister of karnataka has done (with denotification & nitification of land) is continuation to a much lesser extent of as abusive power that has been granted to him but to a MUCH lesser extent than all his predecessors. Remember that it was still legal. The reason his abuse of that power is coming out now is that opposition in Karnataka is scared that many fold worse abuse of that power by them in the last 15 years is about to come out in the next 1-2 years. They are trying to preempt him from doing that.

As for development, BJP is doing just that & very well not just in Gujarat but also in Madhya Pradesh & even Karnataka. Besides, BJP has won more new seats in Bihar than even JDU of Nitish Kumar in Bihar itself. This is because it is BJP that has delivered on Development Mantra more than any one else, including Congress & even its own alliance partners in NDA. Thus BJP's alliance partners ARE taking lessons from BJP & not the other way round.

REPLY

Dabbangg

In Reply to Dhananjay 7 years ago

what a joke!
nitish leant development from corrupt yedurappa!

Dhananjay

In Reply to Dabbangg 7 years ago

"nitish leant development from corrupt yedurappa!" - That's not what I said!

I said, even BSY is engaged in development. Modi has been showing development results since before even Nitish became CM & so is Chauhan in MP.

By the way, BSY has even appointed a retired Karnatak High ourt Judge to review abuse ince 1995 of powers given to CMs .. some thing that COngress is refusing to do w/ 2G scandal by appointing JPC.

Nice attempt at twisting what I wrote. Do read it again after removing your tainted glasses.

Dabbangg

In Reply to Dhananjay 7 years ago

"Thus BJP's alliance partners ARE taking lessons from BJP & not the other way round."

K B Patil

In Reply to Dhananjay 7 years ago

For the last 10 to 15 years, Karnataka's descent into all round corruption is clear to the citizens. Only the politicians seem to be happy about it. Just when the present CM completed 2 years in power, the Lok Ayukta, disgusted with the apathy resigned. One of the significant item of information from newspapers was that during the 2 years of his power, the CM had met the Lok Ayukta only twice. This is a clear indication of how much priority the CM gives to cleaning the state. While this is about the current CM, the previous CM it seems had, as his last act, before giving up office, gave an extension to the chief of a public utility. This chief was subsequently raided by the Lok Ayukta and the details of details of his ill gotten wealth was splashed in all newspapers. So, most citizens of Karnataka know that the choice is between the devil and the deep sea.

K B Patil

7 years ago

The way the BJP high command had to surrender to the Karnataka CM despite clear indications of poor governance is a clear indication that our two main parties are status quoist in nature. The Congress believes only in the charisma of the Gandhis and the BJP only believes that the upper castes will follow them forever. Both parties have a great opportunity to clean the system. But the indications are that neither of them is willing to change their habits. Soon, the smaller parties will come back into the limelight on account of the inertia of the two parties.

India Innovation Fund invests Rs2.5 crore in Mitra Biotech

India Innovation Fund (IIF)-led by IT industry body Nasscom and ICICI Knowledge Park Trust-has invested Rs2.5 crore in Mitra Biotech, a translational biotechnology company focussed on oncology.

Bengaluru-based Mitra Biotech had also received funding from Accel Partners and Kitven (Karnataka government-backed fund). Both Accel and Kitven had invested Rs2.5 crore each in Mitra Biotech.

The innovation fund, which currently has an investment corpus of Rs50 crore, had targeted a final close of Rs100 crore, when it was announced three years ago.

SIDBI is the latest contributor (Rs10 crore) to the fund, whose other investors include Tata Consultancy Services, Bharti Airtel Ltd, ICICI Knowledge Park Trust and the department of science and technology.

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