Indian stock markets open flat

Mon, 25 Apr 09:30 am

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   11:30 am   

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Asian stock markets have opened the week on a mixed note. While stock markets in Hong Kong (up 1%), South Korea (up 0.7%) and Japan (up 0.3%) are trading firm, markets in China (down 0.7%) and Indonesia (down 0.2%) are facing selling pressure. Indian stock markets have started the day on a flat note. Stocks from the consumer durables and FMCG space are trading firm. However, oil and gas stocks are leading the pack of losers.

The BSE-Sensex is trading marginally lower by around 2 points (0.01%), while the NSE-Nifty is down by around 4 points (0.1%). However, mid and small cap stocks are trading firm, with both the BSE Midcap index and BSE Small cap index up by 0.3% and 0.5% respectively. The rupee is trading at 44.52 to the US dollar.

Oil and gas stocks have opened the day on a weak note with RIL, IOC and Petronet LNG leading the losses. The government has directed Reliance Inds (RIL) to immediately stop supplying gas from KG-D6 block to refineries, steel firms and petrochemical plants. Instead, it has asked the company to divert the volume to meet the demand of priority sector consumers as specified by the Empowered Group of Ministers (EGoM). The move has come on the back of a drop in the RIL-operated block's output by about 28%. The block is currently producing about 50 mmscmd gas which is much lower compared to the 69.8 mmscmd according to the plan approved by the government.

As a consequence of the decline in gas output, there has been a pro-rata cut of up to 15% in supply to priority sector consumers such as power and fertiliser companies. Now, with the government's order to restrict KG-D6 supply to only priority consumers, the other consumers such as IOC's refinery in Gujarat, GAIL's Pata petrochemical plant, RIL's petrochemical projects in Gujarat and Maharashtra and Essar Steel will be affected.

Pharma stocks have opened the day on a firm note with Ranbaxy Lab, Orchid Chem and Dr Reddy's leading the gains. Biocon is planning to invest about Rs 1.5-2 bn in the current fiscal year 2011-12 towards Research and Development (R&D) and manufacturing. The biotechnology major is setting up a dedicated R&D facility in Bangalore. This would require an investment of Rs 1 bn. The proposed facility would be able to accommodate about 600 scientists. Apart from investing in R&D, the company will also invest Rs 500 m in the API manufacturing facility in Hyderabad over the next two years. It has already invested Rs 500 m in the facility so far.