The Indian market is likely to see a cautious opening today on mixed global cues. Wall Street closed lower for the second straight day on Tuesday as marketmen raised doubts about the viability about the Federal Reserve stimulus announced last week. The Asian pack was mixed in early trade as the rise in the dollar acted as a positive catalyst for exporters in the region. The SGX Nifty was down 15.50 points at 6,329.50 compared to its previous close of 6,345.
The local market opened lower yesterday tracking the weakness in the global markets. Buying on select counters soon vaulted the indices into the positive zone to touch the day's high. Range-bound trading as a result of political developments in the national capital as well as the financial capital made way for the indices to trade lower once again. The flip-flop continued but buying support in fast moving consumer goods, technology and realty stocks led the markets higher at the close of the session.
The Sensex settled 80.10 points (0.38%) higher at 20,932. The Nifty stood at 6,301, a gain of 28.35 points (0.45%) over its previous close.
The US markets closed in the red for the second day in a row, as investors questioned the viability of the Fed’s stimulus package announced last week. Besides, data showed inventories at US wholesalers grew more than twice as much as expected in September. While some see the build-up as a sign of higher demand, others are worried that supply would outstrip demand. The Dollar Index, which gauges the currency against six major peers, rose 1% in its third straight gain and its biggest advance in three weeks on a closing basis.
The Dow declined 60.09 points (0.53%) to 11,346. The S&P 500 shed 9.85 points (0.81%) to 1,213. The Nasdaq fell 17.07 points (0.66%) to settle at 2,563.
Markets in Asia were mostly in the green as the rise in the dollar was seen as a morale booster for exporters in the region. Meanwhile, China’s property prices rose at the slowest pace in 10 months in October as the government hiked interest rates and put in place new initiatives to curb speculative property prices.
The Jakarta Composite was up 0.08%, the KLSE Composite was up 0.10%, Nikkei 225 surged 1.17%, the Seoul Composite rose 0.31% and Taiwan Weighted added 0.25%. On the other hand, the Shanghai Composite shed 0.40%, the Hang Seng slipped 0.25% and the Straits Times was down 0.43% in early trade.
India's food subsidy has already crossed the Rs40,000 crore mark in the first six months of the current fiscal, Parliament was informed on Tuesday.
The subsidy provided by the government on food in the previous three years, starting from 2007-08, stood at Rs31,259.68 crore, Rs43,668.08 crore and Rs58,242.45 crore, respectively.
Top PFRDA official not bothered over states staying out, exposing another fatal flaw in the project — will the scheme just remain another governmental non-starter?
The state governments have not been enthusiastic participants in the New Pension System (NPS) but this does not bother the Pension Fund Regulatory and Development Authority (PFRDA), which is trying to make the limping NPS run faster. Three state governments have refused to let their employees join the NPS.
When asked about the lukewarm response of the state governments, a top PFRDA official told Moneylife, on the sidelines of an event organised by FICCI in Mumbai today that “We don’t care much whether the state governments come on board or not. In any case, they can opt to stay out of the NPS.”
This shocking admission reveals another fatal flaw in the NPS.
NPS was supposed to be a retirement scheme for government and non-government employees. For Central government employees, this is a compulsory scheme of saving for retirement. For the private sector it is voluntary but there has hardly been any subscription to the scheme.
This is because there has been no effort to publicise it and distributors have no incentive to buy it. Now, if the PFRDA too cannot be bothered whether the state governments are not forced to channel the savings of their employees, the NPS will operate far below its true potential. The success of the scheme will depend on the economies of scale which will come about if there are more and more participants.
Since PFRDA has failed to get on board two of the largest segments, state government employees and the private sector, the NPS will limp along.
Meanwhile, in answer to another question posed by Moneylife, PFRDA claims to have convinced two corporates to switch their employee pension accounts under the NPS.
At Rs20 crore, the two unnamed corporates contribute half of the Rs40 crore of NPS' assets under management (AUM) from non-government or unorganised entities, said PFRDA chairman, Yogesh Agarwal.
Touting transparency and efficiency amongst the advantages for switching over to NPS, Mr Agarwal said that PFRDA is in talks to rope in 10-15 more corporates.
The NPS was introduced for government employees joining after May 2004 and for the unorganised (non-government) sector it was introduced on 1 May 2009. But it has not been able to take off due to reasons which include low incentives to those distributing the products, companies managing the funds and problems over who will do the marketing in a saturated market where NPS competes with the aggressive insurance and mutual fund companies.
New Delhi: Stock of foodgrains in government godowns was "practically double" the buffer norms, food minister Sharad Pawar today said, but maintained that responsibility of distribution to poor lay with the states, reports PTI.
"Our warehouses are full. As per buffer norms we have practically double...There are no shortcomings," Mr Pawar said in the Lok Sabha during the Question Hour.
Mr Pawar insisted that procurement, storage and allocation to states was the responsibility of the Centre but distribution through the public distribution system (PDS) was the job of the states. He blamed the states for not lifting foodgrains allocated to them.
"The government has made an additional ad hoc allocation of 25 lakh tonnes of foodgrains at below poverty line (BPL) prices for distribution to BPL families in states and union territories," Mr Pawar said.
However, since 7 September 2010 when the decision of allocation of this additional foodgrains was taken as per Supreme Court's suggestions, "hardly 6% of this was lifted by the states", he said.
Mr Pawar said the states can hire more warehouses to store excess foodgrains.
In reply to another question, MR Pawar said GPS tracking system was being used to keep an eye on vehicles carrying foodgrains in the wake of reports that grains meant for PDS were being sold in the open market.
He informed the Lok Sabha that Tamil Nadu and Kerala had taken the initiative to include items other than rice, wheat and sugar in the PDS and some other states were also working on it.