Against the backdrop of a strong rally in the US, today's weakness has been extraordinary. Nifty may test 4,960
Political developments in the national capital and weak global cues through the second half of the day resulted in the market paring its early gains and closing in the negative. The indicators show that the downslide may not be over yet and the indices may still lose some more ground. In case the market closes in the negative tomorrow, the Nifty could drop to 4,960 and that will be a 14-month closing low.
The domestic market started the day in the positive on firm cues from the Asian region that were trading higher for a second day in a row. The Nifty opened 53 points up at 5,126 and the Sensex started the day at 17,016, a gain of 176 points on its Friday closing. IT, technology, metal and banking stocks supported early gains. The indices rose to their day's highs in early trade, with the Nifty up at 5,132 and the Sensex touching 17,035.
However, the commotion following the arrest of Anna Hazare saw the market lose ground slowly. Even lower headline inflation numbers for July did not help stop the drop as the indices drifted into the negative in noon trade. There was a minor recovery a short while later, but that was short-lived.
Volatility persisted during the entire session and was more evident in post-noon trading as pressure mounted from the European indices which opened in the red. The indices registered their intra-day lows in the last 30 minutes with the Nifty down to 5,015 and the Sensex to 16,674. Bargain hunting pulled the market up a bit, but it was a negative close for a third straight day. At the close the Nifty had lost 37 points to 5,036 and the Sensex settled at 16,731, down by 109 points.
Markets in Asia opened higher on the news of the Google acquisition that saw Wall Street in the green for a third straight day. But Asian indices settled mostly lower by the end of trade after a report that Germany's economy expanded by a mere 0.1% in the second quarter, signalling a slowdown in Europe's largest economy.
The Shanghai Composite declined 0.71%, the Hang Seng fell 0.24%, the Jakarta Composite lost 0.17%, the KLSE Composite shed 0.10%, the Straits Times tanked 1.45% and the Taiwan Weighted slipped 0.27%. On the other side, the Nikkei 225 rose 0.23% and the Seoul Composite jumped 4.83%.
Back home, foreign institutional investors were net sellers of stocks worth Rs471.09 crore on Friday. On the other hand, domestic institutional investors were net buyers of shares worth Rs99.02 crore.
Chief economic advisor Kaushik Basu said that inflation would remain at an elevated level till December before showing any signs of moderation
New Delhi: Headline inflation in August may touch the double-digit mark, chief economic advisor Kaushik Basu said today, adding that any reprieve from high prices was unlikely in coming months, reports PTI.
"By our calculation there are still a couple of more months of relatively same level of inflation (as in July).
In fact, inflation could climb a little bit next month... it could be going to close to 10% inflation for the month of August," Mr Basu told reporters here.
His comments came after the headline inflation for July declined to an eight-month low of 9.22% as the rate of price rise in food articles and petro-products eased, though pressure remained on manufactured items.
Mr Basu said that inflation would remain at an elevated level till December before showing any signs of moderation.
"By our calculation there are still a couple of more months of relatively same level of inflation," he said, adding, "...it will be roughly where we are, we are expecting, till December. After that we do expect some sharp decline in inflation."
The Reserve Bank of India (RBI) has been hiking interest rates in its bid to tame inflation since March 2010. The high interest rate regime, experts said, was hurting the industrial growth. However, the industrial growth (IIP) for June stood at a better-than- expected 8.8%.
When asked if the RBI is likely to further raise its key policy rates considering the IIP numbers, Mr Basu said: "The IIP news was better news than what we had expected... But RBI will have to take a call."
Mr Basu said that both the government and the RBI would work together and analyse the economic situation.
"We are expecting that we will get together and do an analysis of where we stand... otherwise the news is not good.
On a couple of sectors we have done well," Mr Basu said.
He cited good performance of exports and pick up in foreign direct investments (FDI) as positive factors.
"Exports have been doing well for several months and there is also some indication that FDI, after a year of not doing well, is actually picking up very nicely," Mr Basu said.
Gandhian, along with close associates, remanded to judicial custody for seven days. Parliament adjourned after uproar by opposition parties describing police action as undemocratic
New Delhi: True to his word, Anna Hazare today revived his hunger protest for a strong Lokpal, and even the Delhi police detaining him in the early hours of Tuesday did not deter the 73-year-old Gandhian in his non-violent struggle against corruption.
Mr Hazare was picked up by police at about 7.30am from a residence in east Delhi for "intending to defy prohibitory orders". Late afternoon, he was produced before a special executive magistrate. But he refused to sign a personal bond to be allowed to get out on bail and was remanded in judicial custody for seven days.
Within hours of his detention, a spokesperson for Team Anna said that the Gandhian had begun his hunger protest while in police custody and that he was not accepting even water to drink.
The arrest of Mr Hazare and some of his close associates, set off a groundswell of protests across the country and this appeared to be spreading quickly. The arrest was condemned by political parties, the chief ministers of some non-Congress ruled states, non-government organisations and even parliament did not transact any business after an uproar on the issue forced an adjournment for the day.
As protests built up in several cities and towns over the arrest, Prashant Bhushan, one of Mr Hazare's key associates, announced a march from India Gate to Parliament House on Wednesday to protest against the police action, which he described was taken at the behest of some cabinet ministers. "There is no freedom for Delhi police. It has become a puppet, an ornament in the hands of the central government," Mr Bhushan said. "This is a kind of detention under Maintenance of Internal Security Act (MISA)".
Delhi police commissioner BK Gupta said that the police was not keen that Mr Hazare be sent to judicial custody. He said police was prepared to release him on a personal bond if he would have given an undertaking that he would not defy Section 144 of the Criminal Procedure Code which prohibits the gathering of five or more people and ask his supporters not to do so also.
Mr Hazare is likely to be taken to Tihar jail where he will spend the time in judicial custody. Kiran Bedi, Arvind Kejriwal and Manoj Sisodia, three other leading activists of team Anna, have also been sent to judicial custody on similar grounds.
"This is a return of emergency without official proclamation. What crime did Anna commit? Unless we unite, we will be imposed by a defective Lokpal which protects corruption. We now need solutions not statements of intentions," Kiran Bedi, one of the key associates of Mr Hazare, told the Press Trust of India.
In a message released after his detention, Mr Hazare said this was the beginning of the "second freedom struggle" and he called on people to participate in a "jail bharo" agitation. "My dear countrymen, a second freedom struggle has begun and now I have also been arrested. But will this movement be stopped by my arrest. No, not at all. Don't let it happen," Mr Hazare said.
Opposition parties, peeved over the attitude of the Congress in parliament, said they would meet later today to decide on the course of action. Communist Party of India leader Gurudas Dasgupta said he had proposed a boycott of parliament for three days.
Communist Party of India (Marxist) leader Brinda Karat described the arrest as "a strong attack on democratic rights. ... I believe it also reflects the Congress party's refusal to tolerate any movement against corruption. One can ask, why is the Congress leadership taking this decision? Clearly because its own government is steeped in corruption," she said.
Senior Bhartiya Janata Party leader LK Advani said he was not surprised at the detention of Mr Hazare and he charged the government with looking for scapegoats and stopping peaceful protests instead of fighting corruption. "I am not surprised at this development. This is the direction in which this government is moving. Instead of dealing with the problem of corruption and owning responsibility it is trying to find scapegoats and stopping peaceful protests," Mr Advani told the Press Trust of India.
Arun Jaitley, leader of the opposition in the Rajya Sabha, said, "I think it is a very sad day for Indian democracy. You cannot take away the right to protest and the right to dissent... this we have never seen earlier. This is completely unprecedented."
In Patna, Bihar chief minister Nitish Kumar described the detention of Mr Hazare and his associates as a "rehearsal of emergency" which people will never tolerate. "It is a murder of democracy... It is also a rehearsal of emergency which people will never tolerate," Mr Kumar told journalists. "It seems that the people sitting in Delhi don't have the realisation of democratic values... It is sheer desperation of those sitting at the Centre." He said the act reflected that "the central government is afraid of the mass support the movement has."
Punjab chief minister Prakash Singh Badal also condemned the arrests saying that "the Congress has panicked over the movement of Anna Hazare as it is Congress leaders who have stashed money abroad. We are with the movement."
In Chandigarh, Ludhiana and some other places, people from all walks of life, including advocates and academicians, took to the streets-despite inclement weather-to join the protest for a strong Lokpal. Among them were activists of the NGOs 'India Against Corruption' and Awaaz who launched a relay hunger strike. Traffic was blocked at several intersections.
In Hyderabad, Telugu Desam Party president N Chandrababu Naidu said, "Prime minister Manmohan Singh should apologise to the nation for having sent Hazare and other social activists, who are fighting against corruption, to Tihar jail. The arrest of Hazare and his team is the height of despotic rule of the Congress-led UPA government at the Centre that is suppressing all civil rights."
In Ranchi, members of the '74 Chetna Manch, a forum of participants of the Jayaprakash Narayan movement, staged a sit-in at Shahid Chowk to demand an 'effective' anti-corruption bill. "Ours is a peaceful show of solidarity to Anna Hazare's movement against corruption. If the Anna team believes that effective Lokpal Bill can curb corruption what is the problem for the Centre to accept it," asked convenor Pramod Mishra.
In Maharashtra, crowds gathered in many cities and towns in response to Mr Hazare's call to court arrest. Thousands poured into south Mumbai's Azad Maidan since early in the morning, in preparation for the 'Jail Bharo' programme.
"Around 50 to 70 people will court arrest every half an hour. We will start from 2pm with women supporters, followed by youth and then the others," said Mayank Gandhi, in-charge of the Mumbai unit of India Against Corruption. Social activist Medha Patkar is co-ordinating the protests in Mumbai.
In Nagpur, a large number of people, including activists Umesh Choube and noted economist Srinivas Khandewale courted arrest in support of the demand for an effective Lokpal. Many people wearing 'Gandhi' caps with slogans 'I am Anna' gathered at the Reserve Bank of India Square, on the busy Nagpur-Jabalpur national highway that runs through the Civil Lines area.
In Pune, protestors gathered at Balgandharva Square from the morning to condemn the police action and his detention in Delhi this morning. They carried placards and shouted slogans in support of a strong Lokpal legislation.
In Nashik, a rally was taken out on the main street in protest against the arrest of Mr Hazare and this culminated in a public meeting in front of the district collectorate. Police resorted to a mild cane-charge to clear the road for traffic. The protestors included several professionals and a large number of women and youth. Protests were also reported from Mr Hazare's native Ahmednagar.