A sell-off in the broader markets after a news report that intelligence agencies are looking at price-rigging in select stocks sent the indices lower at the end of the session.
The market opened in negative terrain, tracking its Asian peers which were trading mixed. Profit-taking, along with fears of a hike in fuel prices due to a rise in global crude prices, weighed on the sentiments. The slide continued as the day progressed, and the indices touched the day's lows amid range-bound trade in the post-noon session. The broader indices continued to languish and ended sharply lower. A news report that the Intelligence Bureau is looking at likely price-rigging in select second-rung stocks is said to have caused the decline in the market today. However, the key indices pared some losses, but ended in the red, down over 1% each.
The Sensex ended at 19,696.48, down 238.16 points (1.19%). The bellwether index touched a high of 19,875.51 and a low of 19,611.35, intraday. The Nifty settled 72.85 points (1.22%) lower at 5,903.70. The index touched a high of 5,960 and a low of 5,876.60 today.
The market breadth was dismal today. The Sensex had 28 declining stocks against two gainers while the Nifty closed the session with 38 stocks in the red and 12 in the green. Among the broader indices, the BSE Mid-cap index plunged 2.21% and the BSE Small-cap index dived 3.22%.
ONGC (up 0.50%) and Tata Motors (up 0.25%) were the only gainers on the Sensex today. On the other hand, Reliance Communications (down 3.21%), Jaiprakash Associates (down 3.12%), Jaiprakash Associates (3.12%), HDFC Bank (down 3.07%), DLF (down 2.81%) and Tata Steel (down 2.49%) were losers.
All sectoral indices ended in negative territory, led by BSE Consumer Durables (down 2.98%), BSE Realty (down 2.51%), BSE Bankex (down 2.03%), BSE Metal (down 2.01%) and BSE PSU (down 1.11%).
India's exports in November rose by 26.8% to $18.9 billion year-on-year, prompting the government to exude confidence that the outbound shipments will touch $215 billion this fiscal. Imports also grew 11.2% in November to $27.8 billion, resulting in the trade balance in the month standing at $8.9 billion.
Exports sectors which performed well in the April-November period include engineering goods, petroleum and refinery items and cotton yarn.
Markets in Asia ended mixed, on concerns that China might hike interest rates this weekend after the government advanced the release of the monthly inflation numbers to Saturday. Reports that North Korea is conducting artillery drills spooked the Seoul Composite index.
The Shanghai Composite tanked 0.95%, the Hang Seng tumbled 1.43%, the Seoul Composite was down 0.35% and the Taiwan Weighted shed 0.01%. On the other hand, the Jakarta Composite surged 1.28%, KLSE Composite 0.55%, the Nikkei 225 gained 0.90% and the Straits Times advanced 0.34%.
The Society of Indian Automobile Manufacturers (SIAM) today reported a slower growth in vehicle sales for the first time after four consecutive record-setting months. Sales grew by 17.81% in November as against 45.93% in October on a year-on-year basis. The total number of vehicles sold in the country stood at 12,21,981 units in November as against 10,37,232 units in the corresponding month last year.
The US markets witnessed a lacklustre close on Tuesday following news that the US Securities and Exchange Commission has sent over a dozen notices to hedge funds and other financial institutions to probe insider trading, as well as concerns that the extension of tax cuts could widen the budget deficit. Meanwhile, credit borrowing rose by $3.38 billion in October after increasing a revised $1.23 billion in September, the Federal Reserve said in Washington. Non-revolving loans rose for a third month as federal government education-related lending jumped an unadjusted $31.8 billion.
The Dow shed 3.03 points (0.03%) to 11,359.16. The S&P 500 rose 0.63 points (0.05%) to 1,223.75. The Nasdaq added 3.57 points (0.14%) to 2,598.49.
Institutional investors continued to offload stocks on Tuesday. Foreign institutional investors were net sellers of equities worth Rs522.83 crore while domestic institutional investors were net sellers of stocks worth Rs427.22 crore.
The country's largest two-wheeler manufacturer Hero Honda (down 0.62%) has hiked the prices of its models in the range of Rs500-Rs1,500 to offset the rising input costs.
"We have always taken a long-term view on pricing, given its strategic nature. Hence, we had consciously held back price increase on most of our products despite the rising input costs and hardening commodity prices," a company spokesperson said.
The company said the lowest hike has been on models in the entry segment while Karizma and ZMR have the highest hike of Rs1,500.
Electrical products maker Havells India (down 2.86%) today said it expects to double the revenue from its cable and wire business to Rs 2,400 crore in the next three years, as it expands the capacity of its existing plant here.
The company said it has invested Rs120 crore in doubling the capacity of its cable and wire plant and plans a revenue of Rs1,800 crore from the segment by FY12.
NTPC (down 0.42%) has earmarked Rs1,50,000 crore investment for sourcing equipment for its power projects in the next fiscal, the deliveries of which will be made over five years.
The company, which plans to add over 4,000MW capacity during the current fiscal, recently tied up with Japan-based Bank of Tokyo-Mitsubishi UFJ for a $300-million loan. This is to part finance its capital expenditure plans on its ongoing and new projects.
Maxx Mobile, one of India's largest homegrown mobile phone companies, today announced a record Rs29 crore seven-year deal with Mahendra Singh Dhoni, the captain of India's international cricket team and one of India's most successful sportsman. MAXX's seven-year deal with MS Dhoni makes it one of the longest duration deals signed with any brand endorser in recent times. Prior to this, Maxx had a one-year contract with MS Dhoni.
The seven-year extension deal takes brand endorsement with cricket stars to a new high and provides Maxx Mobile, one of India's fastest growing brands; the right connect with customers across the country. Maxx Mobile will leverage the popularity of MS Dhoni to highlight the advantage of owning its unique brand and also utilize the cricketer's star power to reach out to the youth.
As part of the deal, MS Dhoni will be associated with multiple marketing initiatives planned by Maxx Mobile to promote the brand. These include print and television advertising, outdoor campaigns, promotional events and mass engagement programs across India.
With the increasing likelihood of many more dissatisfied customers switching services on the introduction of number portability, mobile phone firms are pushing executives to be more responsive to customers
How many times have you tried to get a mobile phone service problem resolved and ended up more disappointed? You might find this is changing now. Suddenly, customer service executives are taking a little more interest in such complaints. This is not from any change of heart; simply a new worry that many more disappointed customers might switch services conveniently through the soon-to-be-introduced number portability facility.
It has been observed over the past few weeks that customer service executives are scanning complaint sites on the web, replying to subscribers and trying to resolve the problems. It is understood that the pre-paid phone segment is already seeing a lot of shifting by subscribers who are influenced by frequently-changing call rates. Now, number portability will enable post-paid customers looking for better services, to shift. The new 3G services, which are to be also launched soon, would in all likelihood intensify the rush to change operators.
Fitch Ratings expects that pricing pressure, which so far had been more on the pre-paid segment, will spread to the post-paid segment after mobile number portability (MNP), although to a lesser extent. In addition, new entrants and smaller wireless telecoms will get a stronger chance to compete against incumbent leaders in the post-paid segment where the annual churn rate is only 12-24% compared to 50-70% in pre-paid, the ratings agency says.
Of the total number of mobile phone subscribers in India, only 5% are from the post-paid segment. Interestingly, it has been revealed that out of the estimated 70 crore subscribers, 70% are active users.
Mobile number portability was rolled out in the Haryana circle on 25th November and it is expected that it will be available across all circles in the country by January-end. The schedule is likely to be announced separately.
Currently there are seven to eight mobile service providers (MSPs) in each of the circles. Irrespective of the number of MSPs in a particular circle, the government has fixed the number of 3G-enabled service providers to three or four in each circle. In addition, more and more people are buying smartphones and want to explore the world through mobile Internet. This will create the space for faster and reliable data connection. Therefore, subscribers who find that their existing service provider does not offer 3G services would likely shift to another. Whether it is the basic voice plan or data charges, whoever offers better services and a good overall experience will catch the maximum number of subscribers.
So, to control the possible migration of subscribers, many service providers have directed their CSEs to respond quicker to subscriber queries. Tata Teleservices Ltd (TTSL), which had initiated the tariff war over the past few months, is believed to be at the forefront to provide a better experience to subscribers.
The Tata group company has committed to compensate subscribers if it fails to meet the pre-determined levels of service standards. The Customer Service Charter includes five customer commitments, namely the bill dispute commitment, the call drop commitment, the handset replacement commitment, the value added services (VAS) commitment and the call-cack commitment.
The 'bill dispute commitment' offers resolution of bill disputes within three working days, failing which TTSL will compensate its customers at the rate of Rs25 for every additional day taken to resolve the complaint. Similarly, other commitments also carry compensation in case the services are not according to what is guaranteed.
There is no doubt that each MSP is trying hard to retain subscribers by offering a better experience and solving their complaints at the earliest. However, given the huge number of subscribers, especially in the pre-paid segment, the CSEs will find it difficult to satisfy them all. Nevertheless, it is a good step in the right direction.