Nifty off the 5600 level; mood remains upbeat

Domestic bourses after gaining substantial traction in early trade have now come off from their high points. However, the mood still remains upbeat despite negative global cues on the back of broad buying by funds and retail investors in wake of foreign investors turning net buyers of the nation's equities for a third time this year. On the global front, U.S. stocks ended a volatile trading day mostly flat on Thursday as investors were reluctant to make bets a day before a critical labor market report that could magnify fears the economy is slowing. Meanwhile, the Asian shares too are trading broadly lower in cautious trade on lingering uncertainty on several fronts, including the impact of bad debts on Chinese banks and the global growth outlook ahead of fresh U.S. payrolls data. The street expectation is that U.S. nonfarm payrolls has likely increased by 150,000 in May, after advancing by an 11-month-high of 244,000 jobs in April. The US future indices too were showing a downtick in the screen trade. Back home, the rebound of the Stocks of Anil Dhirubhai Ambani Group (ADAG) companies, which suffered widespread losses in yesterday's trade, after a Delhi court dismissed pleas for a direction to the CBI to make group chairman Anil Ambani an accused in the 2G spectrum scam, mainly boosted the trading sentiment at Dalal Street. Reliance Communications surged over 6% to be a top gainer, Reliance capital advanced 5.90% and Reliance Power gained 3.94%.The 30 scrip sensitive index on BSE -Sensex- was trading above its 18600 mark, while the broadly followed barometer index on NSE-Nifty-after striking the 5600 mark is currently trading below it. The broader indices too are enticing gains of over 0.50% each. The overall market breadth on BSE is vastly in the favour of advances which have thumped declines in the ratio of 1606:635, while 83 shares remained unchanged.

The BSE Sensex is currently trading at 18,608.72, adding 114.54 points or 0.62%. The index has touched a high and low of 18,672.65 and 18,554.40 respectively. There were 26 stocks advancing against just 4 declines on the index.

The broader indices while doing well for themselves were outperforming the larger counterparts; the BSE Mid cap and Small cap indices surged 0.73% and 0.87% respectively. 

The top gaining sectoral indices on the BSE were, Realty up by 1.50%, CD up by 1.23%, CG up by 1.08%, Power up by 0.99% and TECk up by 0.81%. While there were no losers on the index.

The top gainers on the Sensex were Reliance Communication up by 7.01%, Reliance Infra up by 5.32%, L&T up by 1.76%, M&M up by 1.44% and DLF was up by 1.42%.  On the flip side, HDFC down by 0.74%, HUL was down by 0.61%, ITC down by 0.20% and Tata Power was down by 0.01% were the only losers on the Sensex.

Meanwhile, the Rural Development Ministry (RDM) has suggested that farmer should get the 80% of the profit from the resale of land bought from them for development. RDM's suggestion is higher than the suggestion made by the National Advisory Committee (NAC) which had proposed that the farmer should get six times the registered value of the land as compensation and if the land is resold then farmer will get 25% of the profit made by the private developers. The rural development ministry has proposed introduction of this clause in land acquisition bill. The suggested profit share will be calculated after the developer has deducted development cost taxes. The RDM is not in support of NAC's recommendation to merge the land acquisition and resettlement and rehabilitation bill. The proposed profit-share will be calculated after the developer has deducted development costs and taxes. For early compensation for land acquisition, the RDM has suggested a one-time payment and a 30 year annuity payment to farmers to guarantee continuous income support.

India's Land Acquisition policy is highly criticized by public and experts. Recent Uttar Pradesh farmers' protest against the land acquisition for industrial development is the latest in the series of protest against the land acquisition. The aggressive protest of farmers had put pressure on Indian government to add more farmer friendly clause in land acquisition and resettlement and rehabilitation bill. RDM's 30 years annuity model is similar as Haryana's model of land acquisition. Developers and industrial bodies are supporting Haryana's model of land acquisition. The Haryana's Model of land acquisition provides payment of annuity in the form of royalty for a period of 33 years for people whose land is acquired.

However, the RDM's suggestion has been criticized by the private developers and industrial bodies. They have argued that the idea of rural development ministry is not feasible this will reduce the profit margin for developers. They are of the opinion that RDM's proposal does not address the real problem and it will not be able to provide complete solution to this serious problem. In order to secure profit, companies can manipulate their profits and this clause will be ineffective.

The Land Acquisition Act of 1894 is a law in India, which allows the government to acquire private land in that country. Land acquisition literally means acquiring of land for some public purpose by government/government agency, as authorized by the law, from the individual landowner(s) after paying government fixed compensation in lieu of losses incurred by land owner(s) due to surrendering of his/their land to the concerned government agency. The land acquisition act of 1894 was created with the expressed purpose of facilitating the government's acquisition of privately held land for public purposes.

The S&P CNX Nifty is currently trading at 5,585.05, higher by 34.70 points or 0.63%. The index has touched a high and low of 5,604.95 and 5,565.70 respectively. There were 41 stocks advancing against just 9 declines on the index.

The top gainers of the Nifty were RCom up by 6.89%, Reliance Capital up by 6.12%, Reliance Infra up by 5.26%, Reliance Power up by 3.94% and L&T up by 1.95%.

On the flip side, HDFC down by 0.84%, Dr Reddy down 0.68%, GAIL down 0.65%, BPCL down 0.60% and HUL down by 0.55% were the only losers on the index.

Asian equity indices were trading mixed; Seoul Composite gained 0.89%, Taiwan Weighted added 0.61%, KLSE Composite was up by 0.03 points.

On the flip side, Hang Seng declined 0.28%, Jakarta Composite dropped 0.07%, Nikkei 225 shed 0.34%and Straits Times slid 0.38%.

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