Despite record volumes in Reliance, sensex is down by 113 points
Mumbai : Recording an aggregate turnover of Rs 1,671.23 crore on the bourses, Reliance Industries Limited accounted for nearly 22 per cent of the entire turnover recorded at both the Bombay and the National Stock Exchange. Market sources attributed this surge in volume to the shifting of the positions from BSE to NSE in order to avoid backwardation charges.

At the BSE, the Sensex ended the day with a loss of 113.32 points to close at 4,679.63 while the S&P CNX Nifty at the NSE, closed the day with a loss of 19.20 points at 1,416.90.

Of the ten information technology stocks only Infosys Technologies surged 1.1 per cent to close at Rs 7,968. Global Telesystem and ICICI Bank were the other two stocks that gained yesterday. Foreign institutional investors (FIIs) emerged net sellers to the tune of Rs 19.90 crore on Wednesday. Of the 140 stocks traded in the forward group there were 124 lossers and only 16 gainers. Similarly at the NSE-50 there were 43 lossers and only 6 gainers.

Stocks like Himachal Futuristic, NIIT, Pentamedia Graphics, Zee Telefilms, DSQ Software, Aftek Business Machines, Satyam Computers, Silverline, SSI etc all ended the day with substantial losses. On the other hand ITC, BSES, Infosys and Indian Hotels posted the day with marginal gains.

Regarding SEBI decision on not giving contango charges to short sellers, market players were of the opinion that primarily the short sales will come down which will increase the volatility in the market. As a result, the carry forward charges may go up in the short run. However, other sections of the players were of the view that the artificial barriers by Sebi may not be good for the markets in the long run.
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New announcements for review of loans against shares
Mumbai : While admitting that there are some "grey areas" in the guidelines for advances against shares, the Reserve Bank of India (RBI) today decided to refer the issue to the recently constituted Standing Technical committee on coordination between the RBI and the Securities and Exchange Board of India.

The committee will consider the desirability of having an aggregate exposure ceiling for advances against shares as well as fixing prudent margins on all advances against shares and initial public offers.

The issue of loans against shares at low rates of margins had snowballed into a major controversy recently and a joint task force comprising officials from RBI and Sebi had launched investigations into whether banks and market participants were following the guidelines in place. RBI had also said that it would look into the issue in detail and only then change its guidelines in place.

This decision was reinforced by Sebi chairman, Mr. D R Mehta, who reiterated that the technical committee would take up the issue at its next meeting itself as Sebi too was keen to bring in transparency into the system of advances against shares.

While RBI has already issued some guidelines for advances against shares, units, debentures and PSU bonds, to individuals stock brokers and corporates, some grey areas remain where there is need for removal of any ambiguities so that policy of banks for supporting the development of capital markets is transparent and known to all concerned, including investors.
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