Wednesday Closing Report: The bears are at the gate

The market opened lower, tracking weak global cues. The dampener came in the form of the lower-than-expected US existing home sales data, which was down a huge 27% in July. The development dragged down markets across the globe and India was not spared. The benchmarks witnessed range-bound trading in the negative terrain. The market recovered on select buying but profit-booking once again pulled it to a fresh low. However, the indices managed to close off their day’s lows.

 The Sensex ended at 18,179, down 132 points (0.7%). The index touched a high of 18,312 and a low of 18,156 in trade today. The Nifty settled 42 points lower (0.8%) at 5,462, breaching the psychological 5,500 level. The index touched a high of 5,506 and a low of 5,452, intraday.

The market breadth was negative. The Sensex had 23 stocks in the declining list while seven stocks edged higher. On the Nifty, 40 stocks declined against 10 gaining stocks. The broader indices bore the brunt of today’s trade; the BSE Mid-cap index was down 1.5% and the BSE Small-cap index was down 1.4%.

Among the Sensex gainers, Sterlite Industries was up 1%, ONGC gained 0.4% and ITC added 0.3%. DLF (down 3.5%), Tata Steel (down 3.2%), Hindalco Industries (down 3%), Cipla (down 2.6%) and Hero Honda (down 2.3%) led the losers on the Sensex.

The BSE Information Technology (IT) index was the lone sectoral gainer, up 0.01%. The sectoral losers were BSE Realty (down 3.1%), BSE Consumer Durables (CD) (down 1.6%), BSE Auto (down 1.4%), BSE Healthcare (HC) (down 1.3%) and BSE Metal (down 1.2%).

Asian markets settled lower on concerns about the pace of the global economic recovery following the plunge in US existing home sales in July. The development resulted in the Japanese benchmark — Nikkei 225 — touching its 16-month low.

Shanghai Composite plunged 2%, Hang Seng was down 0.1%, KLSE Composite was down 0.6%, Nikkei 225 was down 1.6%, Seoul Composite was down 1.4% and Taiwan Weighted was down 2.5%. On the other hand, Jakarta Composite was down 0.7% and Straits Times added 0.1%,

The US has offered to India and China its full expertise and technical knowhow to exploit the full potential of shale gas to reduce dependence on foreign oil and move towards its goal of energy independence.

As such the Obama administration has proposed do a resource assessment of certain shale basins in India by the US Geological Survey, and provide workshops to train Indian geophysicists on how to do their own resource assessments.

The US markets ended in the red for yet another day on Tuesday, this time on a fall in existing home sales. Sales of existing houses plunged by a record 27% in July as the effects of a government tax credit waned, indicating that lack of jobs threatens to curb US economic recovery. The pace of existing home sales is the slowest since comparable records began in 1999. The Dow declined 133 points (1.3%) to 10,040. The S&P 500 fell 15 points (1.4%) to 1,052. The Nasdaq fell 36 points, (1.6%) to 2,123.

The Plan panel today said the government’s refusal to accord environment clearance to Vedanta’s proposed $1.7-billion aluminium project in Orissa would not tarnish India’s image as an investment-friendly destination.

“I don’t know much about Vedanta, but yesterday’s development will not undermine India's image as investment friendly nation," Planning Commission deputy chairman Montek Singh Ahluwalia told reporters after a function today.

Foreign institutional investors were net buyers of Rs191 crore in the equities market on Tuesday. Domestic institutional investors were net sellers of Rs689 crore on the same day.

IT services major, Patni (up 2.2%), today said it has secured two contracts— a seven-figure, three-year contract from Scandinavia's The Codan Group and another from Serco Learning, a provider of innovative, 21st century educational technology solutions.

The Codan Group is part of the insurance giant RSA Group and operates in Denmark, Sweden and Norway. The contract is to provide managed services around some of Scandinavia's core insurance platforms. With Serco Learning, Patni has won a seven-year contract for the development and delivery of 'Progresso'— Serco's new information management platform for schools.

Infrastructure construction major Atlanta (down 2%) has bagged an order worth Rs 54.72 crore from National Highways, Orissa for construction-related work.

The order involves widening and strengthening of existing intermediate lane to two lane carriage away, according to the company’s filing with the Bombay Stock Exchange (BSE).

Chennai-based EdServ Softsystems Ltd (up 0.6%) said it has signed a Global e-Training Partnership with Ottawa, Canada headquartered Corel Corporation.

Under the partnership, students of EdServ will be eligible to appear for an online test and receive direct Corel Certification. EdServ shall also venture global marketing with Corel certification and address corporate and institution needs to generate qualified Corel designers and multimedia specialists. EdServ will also acquire original software licenses of Corel Corporation through this partnership.


Nuclear bill taken up in LS; controversial word dropped

New Delhi: The government today dropped a controversial amendment to a contentious clause on the liability of suppliers in case of accident in the civil nuclear damages bill, virtually adopting an amendment moved by the opposition BJP in a bid to evolve a consensus on the measure, reports PTI.

Moving the Civil Liability for Nuclear Damages Bill, 2010 in the Lok Sabha, minister of state in the Prime Minister's Office (PMO) Prithviraj Chavan, tabled an amendment to Clause 17(B) which now does not have the word "intent" with regard to suppliers or their employees in causing an accident in a nuclear plant.

The rephrased amendment now reads "the nuclear incident has resulted as a consequence of an act of supplier or his employee, which includes supply of equipment or material with patent or latent defects or sub-standard services."

Significantly, the language matches the amendment moved by BJP leader Jaswant Singh, who today initiated discussion on the bill in the Lok Sabha.

The action of the government, which has tabled 18 amendments to the bill that was considered by a Standing Committee of Parliament, came after intense negotiations with the opposition.

Commending the bill to the house for its consideration, Mr Chavan said the government had sought to evolve a broad consensus on the legislation by trying to take on board the concerns of opposition parties.

The original version of the amendment had come under sharp attack from the BJP and left parties as it provided for proving the "intent" of a supplier of causing an accident if an operator were to claim compensation.

The parties had contended that it was impossible to prove an intent on the part of suppliers or their employees in case of an accident.

After the Union Cabinet cleared amendments to the bill, Mr Chavan held meetings leaders of BJP and left and promised to rework the formulation of Clause 17 following stiff objections from the opposition.

The controversial word "intent" found its mention in an earlier government amendment, which was different from the one recommended by the Parliamentary Committee that examined the bill.

He also justified the addition of Clause 7, which provides for government assuming "full liability" for a nuclear installation not operated by it if it is of the opinion that it is necessary in public interest. This is aimed at taking insurance cover for a nuclear installation.

Mr Chavan explained that the raise in the compensation cap from Rs500 crore to Rs1,500 crore matches a similar provision in the US.

Seeking the support of the House for the proposed law, which is crucial for India's nuclear deals with various countries, Mr Chavan said the legislation is required for providing prompt compensation to victims in the event of a nuclear accident without having to go through legal processes.

Pressing his point, he cited the Bhopal gas leak case and said that in the absence of a relevant law, the victims had run from pillar to post and wait for long for compensation.

The minister said 28 nations having nuclear power generation had the liability law but India and Pakistan were the only two countries which did not have such a law.

Apparently rejecting criticism that the government was hustling with the bill ahead of US president Barrack Obama's visit to the country, he said "It (liability law) is only for protection of victims...It is certainly not to please any country or any leader."

He said the law will enable provision of "upfront compensation" to the victims without any litigation, cutting short jurisdiction of Indian courts. However, it would not bypass any other existing civil or criminal laws.

The role of each of the actors involved in the Indian nuclear programme - operator, vendor, seller and government - has to be codified and responsibility fixed on them, the minister said, adding "This is precisely what the bill seeks to achieve."

He noted that the bill involves technical, economic and legal dimensions and tried to take on board the concerns of all political parties.

Contending that there was "unprecedented consensus" among political parties over the bill, Mr Chavan credited the predecessor NDA government with initiating the process of Indo-US civil nuclear deal.

"That (NDA) government could not complete the task. The task fell on us and are carrying it forward," he said.


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