A lifetime low on the rupee, the spillover effect of the eurozone crisis and poor internal fundamentals ensured that the week was packed with volatility. Bad news for the market continued, causing Indian equities to tank around 4% despite several short covering rallies before the expiry of the November series.
Despite crossing the crucial 4700 level, the Nifty managed to recoup losses to close just above that, down 196 points. The Sensex fell below 16,000 and stayed there to close at 15,695.43, down more than 750 points. All in all, a disastrous week for equities.
Market Movers:
Dashing all talks of a policy paralysis, the Cabinet cleared the bill to increase foreign direct investment to 51% in multi-brand retail and 100% in single brand yesterday, bringing joy to the Indian retail sector. Even though the Bill was cleared with certain riders, industry experts and analysts believe this move will help generate employment in the country, increase manufacturing and help farmers.
Another move that was passed by the Cabinet was the Companies Bill 2011, which aims to introduce mandatory corporate social responsibility (CSR), class action suits and a fixed term for independent directors, among other things. Corporate Affairs Minister, Veerappa Moily, today said he hoped the Bill would get passed this Parliament session.
On the flip side, the depreciating rupee has had a very adverse effect on the economy. After touching its lifetime high of 52.73 per dollar on Tuesday, central bank intervention at 52.55 per dollar levels has helped appreciate the dollar a little. However, the Indian currency is still the worst performing Asian currency, having depreciated over 17% since July 2011.
Some good news came in for Air India late yesterday as the RBI gave a nod to restructuring the beleaguered airline’s debt on the conditions that the restructuring be done within 120 days after getting the sanction of all banks involved. The RBI has also said that the repayment period for the loans should be extended to 15 years from the current 10 years.
State electricity regulators can also heave a sigh of relief as they are now allowed to set tariff rates on their own without filing for an average revenue requirement (ARR) petition first. This move will benefit all power companies, mainly the state electricity boards that are currently suffering huge losses.
Reliance Industries ’ aim to enter the insurance sector takes another hit as its plans to buy majority stake in two Bharti Axa insurance ventures gets mutually terminated due to difference over long term vision and joint management in the future.
Losers & Gainers:
Amtek Auto (Rs 121.30; +28%): Possibility of buyback plans being approved by the market regulator SEBI boosted the stock price of the company.
Pantaloon Retail (Rs 234.05; +19%): News that the company is in talks with foreign players to benefit from the opening up of India’s retail sector saw the company’s share jump in today’s trade.
Parsvnath Developers (Rs 34.10;-41%): Bad times for the company continues as pledged promoters shares continue to get liquidated in the market, beating down the share price.
DB Realty (Rs 68.15;+15%): Even though owner Shahid Balwa has not received bail yet, news of the other five corporates accused in the 2G scam getting released on bail boosted the stock.
Source: www.moneycontrol.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
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