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Global cues, rupee dent equity market; Sensex crashes nearly 700 pts

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SENSEX NIFTY MARKET

Mumbai, Dec 21 : Concerns over global economic growth and threat of a partial US government shutdown spooked international and local equity indices on Friday, with the BSE Sensex plunging nearly 700 points.

Additionally, the US Fed rate hike’s impact on the domestic currency along with profit booking pulled the two main equity indices lower.

However, the declining trend in crude oil prices arrested the sharp correction. The Brent crude oil price further fell to $54 per barrel at the close of market hours from Thursday’s $55.48.

Globally, major Asian markets closed on a mixed note, whereas European indices like FTSE 100, DAX and CAC 40 traded in the red.

Index-wise, the 30-scrip Sensex settled at 689.60 points or 1.89 per cent lower at 35,742.07 after touching an intra-day high of 36,483.49 points and a low of 35,694.74 .

Similarly, the NSE’s Nifty50 also closed in the red. It lost 197.70 points or 1.81 per cent to finish at 10,754.

“Indian markets are catching up with the fall in the Asian markets. Investors have seen that crude oil prices have stopped falling…so now markets are reacting to the Fed decision and worries regarding the global growth,” Deepak Jasani, HDFC Securities’ Retail Research Head, told IANS.

According to Geojit Financial Services Head of Research Vinod Nair: “Concerns on global economy growth and threat of partial US government shutdown created headwinds to the domestic market. Rupee also gave up some gains due to volatility in bond yield.”

“However, fall in oil prices is expected to provide strength to rupee in the near term. Investors are using this opportunity to book profit after the recent rally. The market direction will turn positive as domestic economic indicators remain healthy.”

Rupee lost over 45 paise against the US dollar on Friday, ending at Rs 70.15 from its previous close of 69.70. The decline in the rupee came after it made significant appreciation in the past few sessions.

All the 19 sectors on BSE ended in the red led by heavy selling in finance and banking stocks.

“Market ignored positive news of public sector banks’ (PSBs) recapitalisation and selling was seen across sectors,” said Essel Mutual Fund CIO Viral Berawala.

The government on Thursday had announced fund infusion of Rs 83,000 crore in PSBs by March, which pushed the PSU Bank Nifty index in the green during the initial trading session.

However, the sector-based index ended in the red — down 0.52 per cent — as it succumbed to the overall negative trend in the market.

“Technically, with the Nifty correcting sharply, the short-term trend of the Nifty has turned negative. Further downsides are likely once the immediate support of 10,739 is broken,” Jasani said.

“Any pullback rallies could find resistance at 10,850.”

Except for NTPC and Coal India, all the stocks on Sensex ended lower.

In contrast, Adani Ports and Wipro lost over 4 per cent each, while Maruti Suzuki, Infosys and TCS lost 3 to 4 per cent on Sensex.

Provisional figures from stock exchanges showed that foreign institutional investors (FIIs) bought shares worth Rs 134.14 crore. Domestic institutional investors (DIIs) lost stocks worth Rs 488.55 crore.

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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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