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Falling exports and oil prices subdue markets

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Falling exports, coupled with a continuous weakness in global crude oil prices and caution over third quarter results, depressed Indian equity markets during the late-afternoon trade session on Monday.

This resulted in a barometer index to recede by 165 points.

Both the bellwether indices of the Indian equity markets even touched their new 52-week low during the intra-day trade.

Disappointing December exports’ data, which touched a 13-month low, absence of fresh triggers and bearish global cues dented sentiments.

Caution prevailed over the upcoming global macro-economic data from China, the UK and the US.

Besides, long-liquidation positions and disappointing macro-data which was released earlier in the week eroded investors’ hopes for an interest rate cut during the upcoming monetary policy review of the central bank.

On Tuesday, the US is expected to release its consumer price index (CPI), while China comes out with its index of industrial production (IIP) and GDP (gross domestic product) data points.

Initially, both the Indian bellwether indices opened on a negative note, following lower closing of the US markets on Friday, when they crashed by 2.39 percent and last week’s steep falls.

However, both indices soon pared their initial losses on the back of positive European markets, expectations of healthy Q3 results and short-covering.

In addition, prices were supported by Prime Minister Narendra Modi’s “Start-Up India Action Plan” which was released on Saturday.

The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) was trading lower by 165 points or 0.67 percent.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading in the red. It was down by 48.20 points or 0.65 percent at 7,389.60 points.

The NSE Nifty again breached the psychological level of 7,500 points during the intra-day trade. It touched a new 52 week low at 7,379.45 points.

The S&P BSE Sensex, which opened at 24,400.78 points, was trading at 24,290.45 points (2.45 p.m.) — down 164.59 points or 0.67 percent from the previous day’s close at 24,455.04 points.

During the intra-day trade the Sensex touched a high of 24,524.85 points and a low of 24,268.60 points — its new low in 52 weeks.

The S&P BSE market breadth favoured the bears — with 2,324 declines and only 335 advances.

“Bearish cues — such as the plunge in exports, lower closing of US markets on Friday, and continuous weakness in oil prices and absence of any fresh triggers pulled-down markets,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told.

“After a lower opening the markets’ recovered on the back of positive European markets and short-covering.”

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Global markets under pressure over fear of coronavirus spread

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Stock Market Down

Mumbai, Jan 24 : Fears that the outbreak of coronavirus in China may disrupt economic activity and global growth has sent the stock markets tumbling.

Chinese health authorities on Friday said that 830 cases of pneumonia caused by coronavirus were confirmed in 29 provincial-level regions in the country. The pneumonia has so far claimed 25 lives.

A sharp adverse reaction from Asian, US and European markets was witnessed because China is entering one of its busiest travel periods on account of its Lunar New Year holiday. The virus outbreak could hurt demand.

On Thursday, Chinese stock markets logged its biggest slide in eight months. However, Indian markets closed higher as the oil prices plunged significantly. The global oil benchmark, Brent slipped to $62 a barrel as the virus outbreak in China may dent fuel demand.

Meanwhile official sources told IANS that though over 500 Indian students study in Wuhan city’s medical colleges and universities, most of them had left for home for the Chinese New Year holidays.

Deaths due to the virus have revived memories of the SARS epidemic, caused by a coronavirus, which killed nearly 800 people and infected more than 8,000 others across the world in 2002-2003.

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SC stays NCLAT order on RoC plea for changes in Tata-Mistry verdict

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Cyrus Mistry

New Delhi, Jan 24 : In a major development in the Tata Sons-Cyrus Mistry row, the Supreme Court on Thursday stayed the National Company Law Appellate Tribunal’s (NCLAT) order dismissing the Registrar of Company’s (RoC) plea to modify its verdict on the Tata Sons matter.

Tata Sons had challenged in the apex court the NCLAT’s January 6 order on conversion of Tata Sons from a public to a private company.

Agreeing to hear the Tata Sons’ plea, the apex court on Friday issued a notice to the parties concerned. The three judge bench headed by Chief Justice S.A. Bobde will hear the matter along with the main plea filed by Tata Sons against NCLAT’s verdict.

The National Company Law Appellate Tribunal (NCLAT) had on January 6 rejected the plea by the RoC to modify the appellate tribunal’s judgement in the Tata-Mistry case.

The NCLAT had in its December 18 verdict termed the RoC’s decision to allow conversion of Tata Sons from a public to private company as illegal, while the RoC had filed a plea at the appellate tribunal to remove the word “illegal” from its verdict, among other observations.

The two-judge bench headed by NCLAT Chairman Justice S.J. Mukhopadhaya had observed that the judgment did not cast any aspersions on the RoC.

Posting the matter for hearing after four weeks, the Supreme Court had, on January 10, stayed the NCLAT order reinstating Cyrus Mistry as Tata Sons Chairman. Chief Justice S.A. Bobde said the NCLAT had granted a prayer not made.

However, Mistry has already made a statement that he is no longer interested in taking up the chairmanship of Tata Sons.

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Swamy warns against Air India sale, wants House panel to vet his note

It has been reliably learnt that the Rajya Sabha member had expressed reservations over privatisation of Air India the meeting of a Parliamentary consultative committee earlier this month.

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Subramanian Swamy

New Delhi, Jan 23: The government’s plan to sell national carrier Air India may face political and legal headwinds with senior BJP leader Subramanian Swamy raising the red flag against the decision.

Days before the launch of bidding process by inviting Expressions of Interest (EoI) from potential suitors, Swamy has warned against such move, saying the issue was currently being discussed by a Parliamentary panel.

“Right now, it (Air India disinvestment) is before the consultative committee and I am a member of that. I have been asked to give a note which will be discussed in the next meeting. They can’t go ahead without that,” Swamy told IANS.

“If they do, I will go to court. They know that too,” he cautioned.

A vocal opponent of Air India privatisation, Swamy had earlier suggested to list 49 per cent of Air India shares on stock exchanges while government holds 51 per cent in the carrier as an alternative to selling its entire stake to private companies.

It has been reliably learnt that the Rajya Sabha member had expressed reservations over privatisation of Air India the meeting of a Parliamentary consultative committee earlier this month.

After its failed first attempt, the Modi government has shown great zeal this time to sell Air India. It is set to offer a sweetened deal to potential buyers this time around by removing a large chunk of the debt and liabilities from the airline books.

Aviation Minister Hardeep Singh Puri had earlier said that Air India will be shut down, in case the disinvestment exercise is not successful.

Sources told IANS that the preliminary information memorandum (PIM) inviting EoI has been tentatively scheduled to be unveiled on January 27.

Air India is proposed to be sold along with its subsidiary Air India Express and ground-handling joint venture company Air India Singapore Airport Terminal Services Ltd (AISATS) in which it has 50 per cent stake.

Air India on January 10 came out with tender for engaging aircraft asset management companies for carrying out technical audit of its entire fleet.

A Ministerial panel on Air India chaired by Home Minister Amit Shah on January 7 approved the draft EoI and a share purchase agreement (SPA) for the airline’s disinvestment.

(Nirbhay Kumar can be contacted at [email protected])

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