Tuesday’s Market Preview: Cautious opening likely

Global cues point out to a cautious opening for the local market today. Wall Street closed almost unchanged overnight on concerns about growth prospects in China played on investors’ minds and on profit-booking after the recent market rise. Markets in Asia were mostly higher in early trade on Tuesday as a rise in commodity prices spurred material stocks. The SGX Nifty was 3.5 points lower at 5,928 compared to its Monday’s close of 5,931.50.

The government will announce the wholesale price index (WPI) based inflation numbers for November around noon today. Inflation for October had stood at a 9-month low of 8.58%, down from 8.62% in the previous month.

The market opened in positive territory on Monday, supported by good global cues. However, a sudden bout of selling in the mid-morning session saw the key indices moving below the neutral line. On the other hand, the broader indices withstood the pressure and were on a higher trajectory. The market bounced back into the green in post-noon trade and closed near the day's high. The Sensex gained 182.89 points (0.94%) to close at 19,691.89. The Nifty stood at 5,907.65, a rise of 50.30 points (0.86%) over its previous close.

Markets in the US finished almost flat on Monday as concerns over growth prospects in China after the steep rise in November inflation played on investors’ minds and on profit-taking after the recent rise in stocks. Meanwhile, the much-debated $858 billion bill to extend tax cuts for two years secured 60 votes in the Senate, the threshold needed to schedule a final vote. Investors are awaiting the outcome of the Federal Reserve's policy meeting on Tuesday afternoon. However, marketmen expect little change from the central bank with respect to its near-term outlook for monetary policy or its second round of quantitative easing.

The Dow rose 18.24 points (0.16%) at 11,428.56. The S&P 500 added a mere 0.06 of a point to close at 1,240.46. The Nasdaq shed 12.63 points (0.48%) at 2,624.91.

Markets in Asia were mostly in the green in early trade on Tuesday, boosted by higher commodity prices. Commodities rose on a weak dollar as China desisted from hiking interest rates, despite inflation rising to a 28-month high in November.

The Shanghai Composite gained 0.26%, the Hang Seng was up 0.27%, the Jakarta Composite advanced 0.20%, the Nikkei 225 was flat gaining 0.08 points, the Seoul Composite was up 0.28% and the Taiwan Weighted added 0.13%. On the other hand, the KLSE Composite and the Straits Times were down 0.05% each. The SGX Nifty was 3.5 points lower at 5,928 compared to its Monday’s close of 5,931.50.

The government may charge erring telecom firms a maximum of up to Rs7 crore as liquidated damages for failing to meet the roll-out obligations as per licence terms and conditions.

Communications and IT minister Kapil Sibal informed the Lok Sabha on Monday that “to cover the losses, if any, to the government due to delay in roll out, provision of liquidated damages exists in the UAS license agreement.”

As per the agreement, the Department of Telecom (DoT) will be entitled to recover the charges at Rs5 lakh per week for the first 13 weeks, Rs10 lakh for the next 13 weeks and thereafter Rs20 lakh for 26 weeks, subject to a maximum of Rs7 crore, he added.


Insurance cos paid Rs 262 cr as claims towards Mumbai attacks

New Delhi: Insurers have paid Rs 262 crore towards claims arising out of the 26/11 Mumbai terror attacks and the money came from a corpus set up by general insurers.

"In 2009-10, Rs 212 crore were (paid) towards further on-account payments made for the losses arising from the terrorist attack on November 26, 2008 at Mumbai," Insurance Regulatory and Development Authority (IRDA) said in its annual report 2009-10.

An amount of Rs 50 crore had already been settled in fiscal 2008-09.

Insurers expect the total claims to touch Rs 500 crore.

"The loss to the pool (corpus set up by insurers) from this incident is at present estimated at Rs 500 crore including the on-account payments made so far," the report said.

Luxury hotels Taj Mahal Palace and Oberoi Trident were among the places targeted by terrorists on November 26, 2008, in a co-ordinated attack across Mumbai that killed over 200 people and left the hotels damaged and burnt.

The Terror Pool was set up in 2002 and members contribute 100 per cent of terror risk insurance premium to the corpus, which is shared among pool members to settle claims.

During 2009-10, the total premium ceded to the terrorism pool was Rs 306 crore and claims paid were Rs 214 crore.

The pool's premium in the previous year was Rs 223 crore with claims paid at Rs 50.67 crore.

The pool is protected by an excess of loss reinsurance programme, and loss in excess of Rs 150 crore are recovered from the reinsurers.

GIC and New India insurance have maximum share of 19.61 per cent each in the corpus, followed by United India at 12.86 per cent.


HSBC Global Asset Management says EM assets cross USD 100- billion

HSBC Global Asset Management today said its emerging markets assets have crossed USD 100-billion.

HSBC Global Asset Management classifies emerging markets assets as those investments in countries within the MSCI Global Emerging Markets Index.

HSBC Global Asset Management's Chief Executive, John Flint, attributed this success to proven investment capabilities, along with the strength of the HSBC brand and its extensive footprint in emerging markets.

"The world's centre of gravity is moving toward the emerging markets and HSBC has for many years been at the forefront of providing quality investment solutions," Flint said in a statement here.

"We now have two distinct opportunities for growth within our emerging markets businesses. The first is to develop investment product for domestic clients in the high growth emerging economies. The second is to develop product to facilitate portfolio flows from the developed world to the emerging markets," Flint said, adding, "during 2011 we plan to launch a range innovative capabilities and products that will capitalise on both of these opportunities."

HSBC Global Asset Management has more than 200 dedicated emerging market investment professionals located across 18 key locations.

"The achievement reinforces the HSBC Group focus on emerging markets globally. The Group is committed to its India business as it is one of the key emerging markets and India is a significant contributor to our global emerging markets assets," HSBC Asset Management(India)'s Chief Executive Officer, Vikramaaditya, said.


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