FMCG & pharma drag markets down

Thu, 8 May 01:30 pm

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After trading in the positive territory for the most part of the day's session, Indian equity markets slipped in to the negative territory led by selling among index heavy weight stocks. Stocks from the FMCG and healthcare sectors are leading the losses, while banking sector stocks are trading higher.

The BSE Sensex is down 32 points and the NSE-Nifty is down 12 points. The BSE Mid Cap index is trading lower by 0.2%, while the BSE Small Cap index is trading higher by 0.3%. The rupee is trading at 59.99 to the US dollar.

Majority of the mining stocks are trading in the red with MOIL being the biggest gainer. As per a leading financial daily, the Coal Ministry has categorically stated that companies which have been allocated mines for a specified purpose shall not have the right to market, sell or export the fuel to any third party. This development comes in the light of complaints of misuse by owners of captive mines. It has been alleged that Jindal Steel and Power Ltd (JSPL) has been selling coal from its captive mines in Chattisgarh. In February, the Coal Ministry had put three mines, two in Jharkhand and one in West Bengal, on auction after being pulled up by the Comptroller & Auditor General for delaying the auction process. As per the government auditor, allotment of 57 mines to private companies without an auction caused a notional loss of Rs 1.8 trillion to the exchequer. The Ministry has an estimated 500 million tonnes of reserves for captive use of steel, cement and sponge iron firms.

Energy stocks are trading mixed today. ONGC is leading the stock of gainers, whereas Chennai Petroleum and MRPL and trailing weak. As per a leading business daily, Oil & natural Gas Corporation (ONGC) is planning the third phase of drilling redevelopment of its prime Mumbai High oil & gas fields. This is in order to revitalize its ageing oil & gas in the Arabian Sea. The third phase of drilling is estimated to cost about US$ 1.1 bn which will start during FY15 and continue over 3 to 4 years. ONGC is targeting a production of about 132 - 147 m barrels of incremental crude oil through the investment. The company will also integrate its smaller reservoirs to the main reservoir to improve economies of scale in the production and development process. Earlier in the phase I of the redevelopment that completed in 2007, the company spent US$ 1.5 bn that led to 57 m tonnes of additional crude and 16 bn cubic meter of gas. The second phase is proposed to produce 36 m tonnes of incremental crude oil and 6 bn cubic meters of gas.