Nifty may move in the range of 5,090 and 5,250
Institutional buying in blue-chips and support from the Asian region saw the market closing with gains for the third consecutive day. The rally was supported by a high volume of 83.56 crore shares on the National Stock Exchange (NSE). At the start of the session itself the Nifty crossed the resistance of 5,180, mentioned by us in the Wednesday’s closing report. From here we may see the rally continuing up to the level of 5,250. The Nifty may move between 5,090 and 5,250.
The market continued its positive trend, opening in the green on supportive cues from the Asian region. The Nifty opened 59 points up at 5,217 and the Sensex gained 124 points to resume trade at 17,201. Buying in index heavyweights supported early gains. The opening figure on the Nifty was its intraday high and the Sensex rose to 17,259 at its high.
The market was range-bound till the late morning session after which a sharp sell-off in realty and banking stocks pushed the market to the day’s lows. At the lows, the Nifty fell to 5,162 and the Sensex went back to 17,107.
A fall in the weekly food inflation numbers boosted the market in noon trade. Select buying by institutional investors helped the indices make a gradual upmove in post-noon trade. The market settled higher for the third day in a row. The Nifty gained 46 points to end the session at 5,205 and the Sensex surged 157 points to settle at 17,234.
The advance-decline ratio on the NSE was 929:508.
Among the broader indices, the BSE Mid-cap index closed 0.66% up and the BSE Small-cap index surged 1.30%.
The top sectoral gainers were BSE Oil & Gas (up 2.69%); BSE Consumer Durables (up 2.54%); BSE TECk (up 2.02%); BSE Metal (up 1.89%) and BSE Capital Goods (up 1.82%). BSE Realty (down 2.22%); BSE Fast Moving Consumer Goods (down 0.81%); BSE Bankex (down 0.37%) and BSE Power (down 0.25%) ended lower.
Sterlite Industries (up 5.49%); Tata Motors (up 4.10%); Larsen & Toubro (up 3.76%); Bharti Airtel (up 3.66%) and Reliance Industries (up 3.48%) were the top gainers on the Sensex. The losers were led by DLF (down 3.47%); Bajaj Auto (down 3.07%); BHEL (down 2.84%); Hero MotoCorp (down 2.21%) and Jindal Steel (down 2.04%).
The top performers on the Nifty were Sesa Goa (up 7.47%); SAIL (up 6.91%); Sterlite Industries (up 6.73%); Grasim (up 4.43%) and L&T (up 4.16%). The draggers of the index were Ranbaxy (down 6.82%); Punjab National Bank (down 3.59%); DLF (down 3.56%); Jaiprakash Associates (down 3.23%) and BHEL (down 3.19%).
Markets in Asia settled mostly higher as higher commodity prices supported gains in energy and metal stocks while on the flipside, the Japanese benchmark edged lower as a strengthening yen weighed on exporters. Investors are now focused on the US GDP data for the fourth quarter of 2011, due to be released later today.
The Hang Seng rose 0.31%; the Jakarta Composite added 0.07%; the Straits Times advanced 0.75% and the Seoul Composite gained 0.39%, On the other hand, the Nikkei 225 shed 0.09% and the KLSE Composite lost 0.19%. Markets China and Taiwan were shut for the Lunar New Year holidays. At the time of writing, two of the three key European markets were lower in trade while the US stock futures were in the green.
Back home, foreign institutional investors were net buyers of shares totalling Rs1,147.01 crore on Wednesday while domestic institutional investors were net sellers of shares amounting to Rs712 crore.
In one of the biggest announcements related to job creation at the World Economic Forum, Indian IT major HCL Technologies today said the company will create 10,000 local jobs in Europe and the US over the next five years.
The announcement came a day after German Chancellor Angela Merkel said that Europe would work toward becoming a benchmark investment destination on the global arena, but she would want foreign companies coming there to create jobs as well. HCL Tech gained 1.54% to close at Rs427.30 on the NSE.
Surana Ventures has announced the completion of its module manufacturing unit in the Fab City, 40 km from Hyderabad, close to the new international airport and also the commissioning of a 5 MW solar photovoltaic unit in Gujarat. The stock declined 2.63% to close at Rs18.50 on the NSE.
Essar Oil has commenced the production of viscosity grade bitumen from its Vadinar Refinery. Viscosity grade bitumen conforms to the BIS standard IS 73:2006, which has been widely adopted by the Ministry of Road Transport and highways, National Highway Authority of India, Directorate General of Supplies and Disposal and all government Public Work Departments (PWDs). The stock lost 0.32% to close at Rs62.20 on the NSE.
For the purpose of crackdown of these MLMs, the Rajasthan police have formed a Special Operation Group headed by the Additional Director General (ADG) of Police. This is something like Economic Offences Wing (EOW) of the Andhra Pradesh police
Following the ongoing probe in the multi level marketing firm, Right Concept Marketing (RCM), in Bhilwara district of Rajasthan, the police have registered 24 cases against 10 different ponzi schemes. Moneylife had recently reported that Rajasthan police are probing more MLM frauds after cracking RCM and Gold Sukh. (http://www.moneylife.in/article/rajasthan-police-probing-more-mlm-frauds-after-cracking-rcm-and-gold-sukh/23021.html)
According to the sources, many such MLM companies promising high returns and investment in gold are been investigated. “We came across MLMs promising high returns while investigating RCM. These companies, apart from luring people with schemes which double their money, are promising investment in livestock such as goats. Star Net is one among the 10 companies against whom we have registered complaints,” said an officer close to investigation, preferring anonymity. He adds, “Altogether we have registered 24 complaints. Many of them also have close links with politicians.”
For the purpose of crackdown of these MLMs, sources say, the police have formed a Special Operation Group headed by the Additional Director General (ADG) of Police. This is something like Economic Offences Wing (EOW) of the Andhra Pradesh police.
Meanwhile, according to the sources, there is a possibility of more arrests in the RCM fraud. Further, eight more cases have been registered against it in various districts of Rajasthan including Jalor, Jaipur, etc. “Recently the Rajasthan High Court rejected the bail application as well as the request to quash the FIR by the four arrested officers of RCM,” says the officer.
According to police estimates, the RCM fraud is in the tune of Rs2,000 crore. The business model of RCM, was based on networking where it invited people to become members on the payment of Rs1,500. To avail 10% commission they were asked to recruit more people in the scheme. The company is not registered under the Companies Act.
An officer close to investigation told Moneylife that the bank accounts of the company have been frozen. “The recovery of money will still require time. We are co-ordinating with various central government authorities like Income Tax department.”
In November, last year, ponzi scheme Gold Sukh made headlines after it allegedly duped 1.75 lakh investors of more than Rs300 crore. Gold Sukh promised returns 27 times than the investment in just 15 months and was able to lure many politicians, police officers and businessmen.
Experts said the slowdown in credit growth was on account of the high interest rate regime that has been in place for over a year, as the Reserve Bank of India (RBI) hiked lending rates to rein in inflation
Mumbai: Non-food credit offtake increased 17.1% to Rs44.90 lakh crore during the 12 months to 13th January, amid the high interest rate regime, reports PTI.
It was Rs 38.31 lakh crore during the year to January 14, 2011, RBI data showed.
Until August, the offtake had been growing at over 18% on an annualised basis before it started slowing down.
Experts said the slowdown in credit growth was on account of the high interest rate regime that has been in place for over a year, as the Reserve Bank of India (RBI) hiked lending rates to rein in inflation.
The RBI had raised key lending rates by 350 basis points through 13 hikes since March 2010 to curb inflation which has been above 9% mark for most of last two years.
Meanwhile, deposits rose to over Rs59.61 lakh crore during the 12-month period to 13th January, from Rs50.92 lakh crore during the corresponding period to 14 January 2010.
This translates into a growth of 17%.
In its third quarterly monetary policy review last week, the RBI had said credit growth was likely to slow down as a result of the rate hikes.
The apex bank revised downwards its projection for non-food credit growth to 16% from the earlier estimate of around 17%-18% for this fiscal. Deposit growth has been pegged at 17%.
During FY10-11, bank credit offtake had increased by 21.5%, while deposits had grown only 15.5%.
Indian industry has complained that the high interest rate regime has resulted in slowing down of investment and industrial growth.
Economic growth slowed to a nine-quarter low of 6.9% in the July-September period.