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Sensex nosedives over 700 points, Nifty ends below 10,500 mark

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SENSEX-

Mumbai, Dec 10: The Indian equity market slumped around two per cent on Monday, with the S&P BSE Sensex shedding over 700 points, tracking a similar sell-off globally along with uncertainties over the upcoming results of the recently held state elections.

The Nifty50 on the National Stock Exchange fell below the 10,500 mark and the Sensex ended below the psychologically significant level of 35,000 points.

On the domestic front, the results for the recently held assembly elections of five states would be out on Tuesday. Exits polls last week showed that the party in power — the Bharatiya Janata Party — is seen facing a tough challenge which has raised concerns among the investors.

The elections are considered a crucial indicator of public mood before the Lok Sabha elections in 2019.

In the global markets, crude oil prices rose on Monday after the Organization of Petroleum Exporting Countries and Russia on Friday agreed to reduce supplies from January 2019.

Further, there was a spike in trade war concerns after China on Sunday summoned US Ambassador Terry Branstad over the US arrest warrant for Huawei’s global CFO Meng Wanzhou who was taken into custody in Canada last week.

Index-wise, wider Nifty50 of the National Stock Exchange (NSE) closed lower by 205.25 points or 1.92 per cent to 10,488.45 points.

The barometer 30-scrip Sensitive Index (Sensex), which opened at 35,204.66 points, closed at 34,959.72 points — lower by 713.53 points or two per cent — from its previous session’s close of 35,673.25 points.

It touched an intra-day high of 35,246.97 and a low of 34,915.77 points.

“Our markets have fallen in line with other global markets which were down due to resurgence of US-China friction and rise in crude prices,” HDFC Securities’ Retail Research Head Deepak Jasani told IANS.

On the currency front, the Indian rupee weakened to 71.38 against the US dollar from its previous close of 70.81.

“Dollar-rupee opened higher, around 71.35 on spot, after exit polls suggested that BJP may lose three major states,” said Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities.

“If exit polls are true, then it can increase the political risk premium on the rupee.”

Last Friday — the previous trade session — bargain hunting and lower crude oil prices lifted the key Indian equity market indices by around one per cent.

Consequently, the NSE Nifty50 had ended higher by 93 points or 0.87 per cent at 10,693.70 points, whereas the Sensex closed at 35,673.25 points, up 361.12 points or 1.02 per cent.

IANS

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Markets open on positive note

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Sensex Nifty Equity

Mumbai, Feb 20: The 30-scrip Sensitive Index (Sensex) on Wednesday opened on a positive note during the morning session of the trade.

The BSE Sensex opened at 35,564.93 before touching a high of 35,581.14 and a low of 35,520.21.

It was trading at 35,528.69 up by 176.08 points or 0.50 per cent from its Tuesday’s close at 35,352.61.

On the other hand, the broader 50-scrip Nifty at the National Stock Exchange (NSE) opened at 10,655.45 after closing at 10,604.35.

The Nifty is trading at 10,656.25 in the morning.

IANS

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PF funds’ investment in IL&FS bonds have no government guarantee: Finance Ministry

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IL&FS Financial Service

New Delhi, Feb 19 (IANS) The provident and pension fund trusts that invested in the IL&FS bonds now fear loss of money as the debt-ridden company’s bonds are unsecured debt, and the Finance Ministry says superannuated bonds do not carry any government guarantee and all such instruments have to face all market-related risks.

“Since these are investments in bonds, the government does not ensure any guarantee on them as such and if these are invested in stock markets, they carry the market risks as applicable. It is between the bond issuer and bond holders…,” the Finance Ministry said in response to IANS queries.

Thousands of crores of money of more than 15 lakh employees of both public and private sector companies have exposure to IL&FS bonds.

However, queries sent to the EPFO Commissioner and Labour Minister Santosh Gangwar remained unanswered.

Over 50 funds that manage retirement benefits of over 15 lakh employees have exposure to IL&FS. PF trusts of state electricity boards, public sector undertakings (PSUs) and banks are among them. The provident and pension fund trusts have filed intervening applications in the National Company Law Appellate Tribunal (NCLAT) stating that they stand to lose all the money since the bonds are under unsecured debt.

Usually, retirement funds have a low-risk appetite and invest in “AAA” rated bonds (which IL&FS bonds used to be once upon a time) and get assured returns with low interest rates.

The worries of pension and provident fund trusts come from the classification of IL&FS profiling its companies as to which can meet the dues obligations. Many important trust managing funds of PSUs like MMTC, IOC, Hudco, SBI and IDBI are among those filing petitions. From private sector, HUL and Asian Paints are among the petitioners.

IL&FS is currently under resolution process at the National Company Law Tribunal (NCLT). The process will decide under Section 53 of the IBC the order of priority for distribution of proceeds of the process.

The beleaguered company has informed the NCLT that of the 302 entities in the group, 169 are Indian companies, out of which only 22 are emerging as those which can meet all obligations (green), while 10 firms can pay to only secured creditors (Amber). There are 38 companies of IL&FS (red) which cannot meet any obligations of payment, and 120 entities are still being assessed.

These PF and provident funds trusts are worried that if payment is limited to secured creditors, then only financial creditors like banks will receive the dues while unsecured bond-holders will be get any payments.

IL&FS bonds attracted investments by PF trusts as it had the shareholding of SBI and LIC giving its bonds the comfort factor.

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Sachin Bansal invests Rs 650 crore in Ola

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Bengaluru, Feb 19 (IANS) Internet entrepreneur and Flipkart co-founder Sachin Bansal has invested Rs 650 crore, or about $92 million, in ride-hailing platform Ola in his personal capacity as investor, the company said in a statement on Tuesday.

This investment is part of Ola’s larger Series J funding round. It is also the largest investment by an individual in Ola to date, it said.

“Ola is one of India’s most promising consumer businesses that is creating deep impact and lasting value for the ecosystem. On one hand, they have emerged as a global force in the mobility space and on the other, they continue to build deeper for various needs of a billion Indians through their platform, becoming a trusted household name today,” Bansal said.

He further said he has known Ola founder Bhavish Aggarwal as entrepreneur and friend over the years and that he has great respect for what he and the team at Ola have built in 8 years.

“We are extremely thrilled to have Sachin onboard Ola as an investor. Sachin is an icon of entrepreneurship and his experience of building one of India’s most respected businesses ground up, is unparalleled,” Ola CEO Bhavish Aggarwal said.

Ola integrates city transportation for customers and drivers onto a mobile technology platform ensuring convenient, transparent, safe and quick service fulfilment, the statement added.

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