The market ended its three-day winning streak, as the recent rally led investors to book profits. With a clutch of Asian markets closed for local holidays, cues from the regional peers were limited. The lower opening of the influential European markets also weighed on the sentiments.
The local markets opened in the green this morning on support from the Asian bourses that were open today. The Sensex and Nifty touched their intraday highs of 20,105 and 6,037 soon after the opening bell. However, they could not sustain the gain as profit booking led the steep plunge in mid-morning trade. While the market made feeble attempts of a recovery, the market succumbed to the selling pressure.
The Sensex ended 60 points (0.30%) down at 19,941, gaining some strength from the day’s low of 19,802. The Nifty settled at 52,991, down 18.05 points (0.30%). It touched an intraday low of 5,946.
The market breadth on the Sensex was equated with 15 stocks in the green and a similar number ending in the red. The breadth on the Nifty was negative — 31 scrips declined, 18 edged higher and one stock returned unchanged. The broader indices underperformed the key benchmarks. The BSE Mid-cap index was down 0.37% while the BSE Mid-cap index shed 0.22%.
The top Sensex gainers included Maruti Suzuki (up 3.59%), HDFC (up 1.61%), State Bank of India (SBI) (up 1.40%), Tata Power (up 0.98%) and Wipro (up 0.92%). The main losers were Jaiprakash Associates (down 2.76%), Reliance Communications (RCom) (down 2.08%), Larsen & Toubro (L&T) 1.97%), TCS (down 1.91%) and Infosys (down 1.66%).
The sectoral gainers did not have any convincing gains today. BSE Consumer Durables (CD) (up 0.99%), BSE Bankex (up 0.42%) and BSE Fast Moving Consumer Goods (FMCG) (up 0.21%) were the noteworthy gainers. The losing sectors were BSE Realty (down 1.60%), BSE IT (down 1.33%) and BSE Technology (TECk) (down 1.05%).
At a time when the country is facing several internal security threats, home-grown security solutions firm Orkash has developed an automated intelligence- based network to combat situations such as terrorism, Naxalism and insurgency.
The system named Unconventional Conflict and Intelligence Management System (UCIMS) is highly capable of collaborating various databases and information sources to create local intelligence pivotal to executing sharp, focused operations.
While a clutch of markets in Asia remained closed for local holidays, the ones that were open ended on a mixed note. While the Hang Seng ended higher as the Hong Kong Monetary Authority expressed optimism on the country-state’s economic growth, the Japanese market settled in the red as the yen gained strength following assurances from the US Federal Reserve.
The Hang Seng gained 0.21% and the Straits Times added 0.02% in trade. On the Other hand, Jakarta Composite was down 0.64%, KLSE Composite was down 0.08% and Nikkei 225 was down 0.37%. Markets in China, South Korea and Taiwan were shut today.
All the BRIC nations — Brazil, Russia, India and China — would be member of the UN Security Council in the coming year and could present a united front on several contentious issues, a top Indian diplomat has said.
"This, of course, is predicated on India being elected in October, which is widely anticipated," India's envoy to the UN Hardeep Singh Puri told reporters.
The US market closed mixed on Tuesday as the Federal Open Market Committee (FOMC) reiterated its stand to infuse more money, if required, to boost the economy. However, it kept its overnight interest rates steady at near zero levels. In other news, US housing starts surged in August to their highest level in four months, while permits for future construction rose, indicating the housing market was beginning to stabilise. The Dow was up 7.41 points (0.07% at 10,761. The S&P was down 2.93 points (0.26%) at 1,139. The Nasdaq was down 6.48 points (0.28%) at 2,349.
Foreign institutional investors were net buyers of stocks worth Rs2,311 crore on Tuesday. Domestic institutional investors were net buyers of Rs30 crore worth of equities on the same day.
After nearly four years of legal wrangling, Sun Pharma (down 0.23%) has finally completed the acquisition of a controlling stake in Israeli firm Taro Pharmaceutical Industries Ltd.
Subsequently, the company chairman, Mr Dilip Shanghvi, has taken over as the chairman of the Tel-Aviv based firm, Sun Pharma said in a statement.
The Mumbai-based firm had signed a $454-million merger deal with Taro in 2007, which was terminated a year later by the Israeli firm unilaterally. After this, both the companies had filed various legal suits against each other.
Rating agency Crisil (down 0.63%) has signed an agreement to buy the business of US-based knowledge process outsourcing (KPO) firm Pipal Research Corporation for $12.75 million.
Crisil’s KPO division Irevna and Pipal combination will be uniquely positioned in the high-end analytical offshoring space with the widest range of services, geographic locations and customer diversity.
Elder Pharmaceuticals (down 0.65%) has closed its qualified institutional placement (QIP) issue for raising nearly $50 million (about Rs228 crore). The last date for the closure of the QIP issue was 21 September 2010, the company said in a filing to the Bombay Stock Exchange (BSE) on Wednesday.
Elder Pharma in an earlier filing to BSE had said that its QIP issue was to open with the floor price of Rs414 per share, thus setting the price band for the issue between Rs415 and Rs419.
Foreigners: Foreign institutional investors bought shares at the start and towards...
The know-your-distributor norms introduced by SEBI are making distributors see red; some feel that the mandatory biometric verification is stretching things a bit too far
At a time when the assets under management (AUM) of mutual fund companies are dwindling rapidly, market regulator Securities and Exchange Board of India's (SEBI) tough stand on in-person verification of distributors may just tighten the noose around the struggling mutual fund industry. The new know-your-distributor (KYD) requirements have not gone down too well with some distributors, who question the extent of verification as demanded by SEBI.
The KYD requirements have been introduced by the Association of Mutual Funds in India (AMFI) under SEBI's diktat. It is mandatory to comply with the KYD procedure (with effect from 1 September 2010) before applying for fresh ARN Registration/ARN Renewal. Existing ARN holders are required to comply with KYD norms by the end of February 2011, failing which payment of commission will be suspended till ARN holders comply with KYD requirements.
The requirement of biometric verification seems to have irked the sensibilities of distributors the most. They find the requirement for biometric verification rather excessive and invasive of their privacy. One such distributor told Moneylife, "It is an insult to the integrity of a person who is in this field for more than 20 years and doing his job with the utmost sincerity. It is quite disgusting to learn that after all these years you have been treated like a criminal."
Why the distributors are complaining is because they feel singled out as a threat to security. While they are aware that the step has been taken as a counter against a few ARN holders who have misguided investors for their own benefit, they question why other unscrupulous entities that are known to defraud investors are not given the same treatment by regulators.
"Why is there no biometric process for doctors, lawyers, CAs, dentists and other professionals who can do more harm to an individual than an ARN holder? If AMFI and SEBI think that there are cheats in financial markets then why are the stock brokers not compelled to have this biometric process?" asked a distributor. He added, "If the distributor is required to undergo this insulting process then why not the fund manager who has an opportunity to play mischief with investors' money? The ARN holder can only misguide the client but cannot play mischief with investors' funds, whereas the fund manager has an opportunity to do monkey business with investors' funds. Then why is there no biometric process for fund managers?"
The entire procedure of verification is also quite lengthy and cumbersome. Distributors are required to visit the nearest Point of Service (POS) with duly completed KYD application, self-attested photocopies of relevant documents and two self-attested (passport size) colour photographs. They are then required to produce, in person, the original documents for over-the-counter verification at the time of submission of their applications along with self-attested photocopies of the same. The biometric process is to be completed at the POS, at the time of submission of applications for registration or renewal of ARN along with the KYD application form. Distributors will then obtain the acknowledgement from the POS confirming completion of KYD process. Existing ARN holders are required to send a photocopy of the acknowledgement to the AMCs/RTAs confirming KYD completion.
While most distributors are agreeable to the concept of KYD, they have frowned upon the call for biometric verification. Earlier, Ramesh Bhatt, an advisor, told Moneylife, "People who wish to do business in a straightforward way will not hesitate to give KYC details. The biometric issue needs to be reconsidered." Another planner had quipped, "Investor education is still lacking. I don't know how biometric (checking) will curb the intention of mis-selling. I am not averse to KYD but they should come up with simple and practical solutions."