Government at work!

By definition, a government has no conscience. Sometimes it has a policy, but nothing more. - Albert Camus.

Whether it is due to guilty conscience pricking the Government’s mind or lack of other alternatives, finally, there seems to be some forward movement in policy making at the Centre. After the fuel price hike, we have seen approvals for the Cairn-Vedanta deal and now the RIL-BP deal. Sugar decontrol and FDI in multi-brand retail are also said to be in the works. Changes in the urea policy are also being contemplated.



The market however appears to be fatigued after last week’s run. FII inflows (provisional) on Wednesday also came in lower compared to the average of the past few days. World markets too have been sluggish and choppy. Trading volumes have also declined lately (both here and overseas). Investors seem to be cautious and want to check out the latest batch of quarterly results before committing themselves.

The start today could be mildly positive but don’t expect a great deal as far as movement in the main indices is concerned. Select, stock centric action is the order of the day.

Among the big events, China has hiked rates by 25 bps. The ECB is likely to follow suit later today. Friday’s US monthly jobs report will be tracked closely. Gold has hit a two-week high. Crude oil and the dollar have quietly recovered.

The Nifty could witness fresh selling if it falls below 5610. The index is likely to find support at 5500 levels. On the way up, resistance is placed around 5700 and further at 5750 (which is 200-DMA).

FIIs were net buyers of Rs 2.2bn in the cash segment on Wednesday, according to the provisional NSE data. The domestic institutional institutions (DIIs) were net sellers at Rs 802.3mn on the same day. In the F&O segment, the foreign funds were net sellers at Rs 1.78bn.

The foreign funds were net buyers of Rs 8.6bn in the cash segment on Tuesday, according to SEBI data. Mutual Funds were net sellers at Rs 1bn on the same day.

Companies with insurance in their portfolio could gain amid reports that IRDA has scrapped the contentious profit rule for launching IPOs. Banks may also react to the RBI’s draft on equity investments in non-financial arms.

SBI might take a knock on concerns it could announce additional provisions in Q1. SKS Microfinance may be in action after the Centre said RBI will be the sole regulator for MFIs. Shipping firms may fall as bunker oil prices touched $650 last week.

Australia’s Perdaman Industries has again moved court against Lanco Infratech, seeking a restraint on the Indian major from mortgaging of Griffin Coal in future.

GMR Infrastructure’s unit GMR Airports Holding has raised Rs 5.84bn through an issue of compulsorily convertible preference shares which can be converted at the time of public offer.

Oil marketing companies have received a cash subsidy of about Rs 70bn to cover losses incurred in the last quarter of FY11. They will get another Rs 130bn in two tranches on July 12 and July 19.

The Government’s net indirect tax receipts in Q1 FY12 grew by 32% to Rs 765bn, while gross direct tax collections rose by about 23% to Rs103bn.