The first support for the Nifty is at 5,600, followed by 5,500
The market closed lower today in lacklustre trade. The consolidation in the Asian markets, after the recent rally, also weighed on investors.
As expected, the domestic market opened sideways after a flat finish on Monday, in the absence of cues from the United States, where markets were closed on Monday for the Independence Day holiday. Markets across Asia also consolidated their gains and were trading lower this morning. The Nifty opened nine points higher at 5,660 and the Sensex gained 23 points at 18,838. The opening numbers on the benchmarks were also their day's highs.
The market continued drifting southwards amid choppy trade and the lack of any major triggers. The indices touched the day's low in post-noon trade with the Nifty falling to 5,612 and the Sensex to 18,694. Buying in select sectors led the indices marginally higher, but profit booking kept a cap on the gains and the market closed in the negative today. The Nifty finished the session 18 points lower at 5,632 and the Sensex closed at 18,745, down by 70 points.
The Nifty moved in the range of 5,500 and 5,690 today, in line with our expectations, detailed in Monday's closing report. The upmove has been stalled. The first support for the Nifty is now at 5,600, followed by 5,480.
The advance-decline ratio on the National Stock Exchange (NSE) was balanced at 872:897.
Among the broader indices, the BSE Mid-cap index shed 0.09%, while the BSE Small-cap index rose 0.20%.
BSE Auto (up 0.88%), BSE IT (up 0.37%) and BSE Bankex (up 0.33%) were the noteworthy gainers in the sectoral space. On the other hand, BSE Oil & Gas (down 1.60%), BSE Fast Moving Consumer Goods and BSE Realty (down 1.29%) were the top losers.
The top Sensex gainers were Mahindra & Mahindra (up 2.24%), State Bank of India (up 1.57%), Wipro (up 1.06%), Maruti Suzuki (up 0.90%) and Sterlite Industries (up 0.76%). BHEL (down 4.49%), Reliance Industries (down 2.53%), Hindalco Industries (down 1.63%), ITC (down 1.58%) and DLF (down 1.20%) were at bottom of the index.
The major gainers on the Nifty were Ranbaxy (up 3.11%), Grasim (up 2.98%), M&M (up 2.62%), Reliance Capital (up 2.46%) and SAIL (up 2.34%). The main losers on the Nifty were BHEL (down 5.01%), Cairn India (down 3.38%), RIL (down 2.65%), Hindalco (down 1.97%) and ITC (down 1.53%).
Markets in Asia were mixed, as Chinese banks settled lower following comments from global ratings agency Moody's that bad assets would be a bigger burden for lenders than what was anticipated. On the other hand, a steady global economic recovery led Japanese and South Korean stocks higher.
The Hang Seng fell 0.10%, the Jakarta Composite declined 0.74%, the KLSE Composite shed 0.03% and the Straits Times fell by 0.75%. On the positive side, the Shanghai Composite rose 0.13%, the Nikkei 225 added 0.07%, the Seoul Composite gained 0.77% and the Taiwan Weighted closed 0.11% higher.
Back home, foreign institutional investors were net buyers of stocks worth Rs1,131.72 crore on Monday, whereas domestic institutional investors were net sellers of equities worth Rs369.32 crore.
Ashok Leyland, the flagship company of the Hinduja group, today reported a 4.63% decline in total commercial vehicle sales to 8,009 units in June 2011, compared to 8,398 units in the month a year ago.
Domestic sales stood at 6,824 units in June as against 7,497 units in the corresponding month last year, down 8.98%, while exports increased by 31.52% to 1,185 units last month from 901 units in the year-ago period. The stock gained 4.22% at Rs51.90 on the NSE today.
Paper manufacturer Rainbow Papers hopes to increase revenue to around Rs700 crore this fiscal, after the commissioning of the second phase of its Gujarat facility by September. The additional capacity build-up at the Gujarat plant envisaged capital expenditure of Rs327 crore. The expansion is expected to take the company's annual throughput to 3.05 lakh tonne from 1.83 lakh tonne. Rainbow Papers was down 0.25% to Rs60.80 on the NSE.
In a big setback to Aditya Birla group company Idea Cellular, the Delhi High Court on Monday said the six licences of Spice Communications, which it acquired in 2008, would not be transferred to the company as it had not complied with the licence and merger guidelines. The court also slapped a fine of Rs1 crore for not giving the correct information to the court.
The court further said that till Department of Telecommunications (DoT) allows Idea to use the licences of Spice Communication, the "overlapping licences of Spice shall forthwith stand transferred with DoT. The spectrum allocated for such overlapping licences shall also forthwith revert back to DoT." The Idea Cellular stock price declined 2.41% to Rs76.95 on the NSE today.
The telecom tribunal TDSAT on Monday allowed the plea of Tata Teleservices and directed DoT to immediately release the GSM spectrum for the Delhi circle on a priority basis.
The tribunal also slammed Idea Cellular and Unitech and said that they cannot claim parity with Tata Teleservices merely because they have submitted their licence fee earlier than the Tata group firm. Tata Teleservices (Maharashtra) fell 2.49% to Rs19.60 on the NSE.
RBI governor Duvvuri Subbarao stated that the central bank is handicapped by the reliability of some of the basic data that we need to use in policy calculations. This has often resulted in policies turning out to be sub-optimal choices, he added
Mumbai: The Reserve Bank of India (RBI) today expressed concern over the sharply varying macroeconomic data, including those on growth and inflation, which it said on some instances led to off-the-mark estimates on the economy, reports PTI.
"In the Reserve Bank, we are handicapped by the reliability of some of the basic data that we need to use in policy calculations.
"In particular, the data we get on unemployment and wages do not inspire confidence as regards quality-making us second-guess how the provisional numbers may be revised upwards," governor Duvvuri Subbarao said today.
"Sharp volatility in the Index of Industrial Production (IIP) data is a problem. We need to understand what is leading to data volatility as it may lead to policy miscalculations," the governor told the 5th RBI Statistics Day celebrations at the RBI headquarters here.
"Each time when we have to make an assessment of inflation situation, we are left to double-guess how the provisional numbers may be revised upwards," he said.
"When we were making the policy, the IIP numbers available to us in February 2010 was 6.8%, whereas the economy was actually growing much faster. The provisional numbers, which are off the mark by significant margin, can mislead policy calculation," he warned.
The governor admitted that such revisions are also factors behind the RBI making inflation projections that proved to be below the actual number in the last fiscal year.
RBI had initially forecast an annual inflation at 5.5% by March 2011, but subsequently was forced to revise it upwards to a high 7% and then to 8%.
And finally when the year ended, it was at a much elevated level of 8.98%, which was ironically revised further upwards to 9.68% in June.
Similarly, the March IIP numbers were also revised upwards to 7.8% in June from the initial reading of 7.3% released in May, while a sharper revision was seen for the December IIP, which was upwardly revised to 2.5% from the provisional reading of a poor 1.6%.
"Erroneous signals from the then-available IIP data suggested moderation in growth and demand," as well as "the larger-than-usual upward revisions to the past inflation data, had the RBI's inflation projections remaining systematically below the actual outcome," Mr Subbarao admitted.
On the impact of the regular trend of sharp data revisions, the governor said, the RBI's policy formulation is also handicapped by frequent revisions to data.
"We make policies in real time and if the provisional data are inaccurate, the resultant policies can turn out to be sub-optimal choices," he said.
Citing the sharp changes in the gross domestic product (GDP) numbers, Mr Subbarao said, "For FY09-10, the advance estimate of GDP growth rate at market prices from the expenditure side that came out in February 2010 was 6.8%. That was changed to 7.7% in the revised estimate in May 2010 and further to 9.1% in the quick estimate in February 2011.
"Therefore, policy that per force had to use information on advance estimate was fraught with the risk of underestimating the growth momentum," the governor said.
Stating that the recently released employment data throw up a paradox, he said they simultaneously indicate fewer jobs created in the five years to 2010 along with a decline in the long-term unemployment rate.
On the issue of wage statistics, he said, the upward pressure on wages in the unorganised sector is inconsistent with what are believed to be high rates of unemployment and underemployment in the informal economy.
Finally, the website owned by the ADA group says that there is no potential for it in the youth networking business which is dominated by Facebook and other global players, and that its future lies in e-commerce rather than 'free' social networking services
As reported by Moneylife on 1st July BigAdda.com, the blog and youth networking site owned by the Reliance Anil Dhirubhai Ambani (ADA) group, has said that it will discontinue its social media services and focus on its e-commerce initiatives. (Read, "BigAdda to scale down social-networking services".)
In a statement today, Rohit Sharma, chief executive, Reliance Entertainment's digital business, said, "This is a conscious decision to transition BigAdda.com to e-commerce business. We believed that local social media platforms would do exceptionally well. However, local social media networks show no potential anymore with the dominance of Facebook and other global players. We believe that the growth drivers of the digital space are e-commerce, gaming and video on demand (VOD)."
He, however, clarified that the blog written by Bollywood superstar Amitabh Bachchan (BigB, as he is popularly known in film circles) would continue on BigAdda.com. "Fans can continue to read the superstar's blog daily on www.bigb.bigadda.com as BigB's blog has an identity of its own and will continue to connect Big B with millions of fans across the globe," Mr Sharma said.
BigAdda's e-commerce has been in operation since the last three months on a pilot phase and has seen the fastest ramp-up of orders compared to any e-commerce player in India, recently. BigAdda has crossed Rs2 crore in gross value of transactions per month for June, and is poised to be one of the leading e-commerce players in the country, with its combination of readers' offers and the e-tailing business model, the company said.
The total e-commerce market in India is estimated to be between Rs3,000 crore and Rs3,500 crore with contributions from teleshopping around Rs1,500 crore, readers' offers (including teleshopping) Rs1,000 crore and online Rs700 crore. Mr Sharma said, "The alternate retailing market, or readers offer, and teleshopping is growing at a compound annual growth rate (CAGR) of 30%, while the online segment is growing at 50% CAGR. With increasing spending power and aspirations of youth in small towns and the acceptance of credit and debit cards as a mode of online payment, e-commerce will grow exponentially in India."
The ADA group launched BigAdda in 2007 with much fanfare, with the stated aim of achieving a user base of 10 million by 2010. Currently, the site caters to around 5.5 million youth, out of which 3.5 million registered users are from small towns. Although, BigAdda was launched with an aim to evolve a youth community, it failed to stick to this platform. Even today, it is better known as a blog space for celebrities, than for commonplace socialising. Over the past few months, BigAdda also tried to concentrate on gaming, instead of social networking services.