Indian stock markets open in the red

Wed, 16 May 09:30 am

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   11:30 am   

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All Asian stock markets have opened the day in the red. Among the key Asian markets, markets in Japan (down 1.2%) and Hong Kong (down 2,7%) and Korea (down 2.0%) are leading the losses . The markets in China were also down 0.4%. The Indian stock markets have also opened the day on a negative note. All the sectors are trading in the red led by metal and Auto sectors .

The BSE-Sensex is down by around 264 points (1.6%), while the NSE-Nifty is down by around 83 points (1.7%). BSE Mid cap and BSE Small cap are down by 0.8% each. The rupee has fallen further and is trading at Rs 54.23 to the US dollar.

Barring Bharat Petroleum Corpration Ltd (BPCL) and Cairn India, Energy stocks are trading in the red led by Essar Oil and Mangalore Refinery and Petrochemicals Limited (MRPL). As per a leading financial daily, Bharat Petroleum Corpration Ltd's (BPCL) upstream subsidiary that has a 10% stake in Rovuma basin has struck a fortune. As per a recent discovery, the gas field has the potential to add up to 7 to 20 trillion cubic feet (tcf) to the already discovered 17 to 30 tcf of recoverable natural gas reserves in the area. The total recoverable reserves from the prospective gas bed could cumulatively produce between a range of 25 tcf to 50 tcf approximately. A per the management, the discovery will increase the company's strength to raise money from the market for further capex. The management also plans to continue investing in south and north area of the basin along with its consortium partners besides completing all preliminary activities, including approvals from the Mozambique government . By the end of 2013, the company wants to rope in a lead banker for funds sourcing to build an LNG terminal. As per the management, the first shipment of gas is likely to be marketed by 2018.

Cement stocks are trading mixed with Birla Corp and JK Laxmi Cement leading the gainers and India Cements and Chettinad Cement leading the losers.Shree Cement has announced its results for fourth quarter ending March 31, 2012. The company has reported a topline growth of 38% on a year on year basis (YoY).The cement production during the quarter was up 29% YoY versus industry growth of around 9.5%Yo. During the quarter, the company has fully commissioned its 300 MW power project set up at Beawar in Rajasthan.The operating profit (EBIDTA) and bottomline during the quarter reported a growth of 42 % YoY and 74% YoY respectively. The strong performance during the quarter was a result of improved cement demand leading to better price realisation and cost control measures. The company's Board has decided to extend the accounting period for the current year by three months and thus, the current financial year of the company shall be of 15 months from April 1, 2011 to June 30, 2012.As per the management, on account of an overall improvement in construction activity, the cement demand is expected to grow around 8% this year. However, the margins may be impacted on account of increase in fuel prices, depreciating rupee and transportation and other input costs. The company has already started work to set up a new clinkerisation unit (unit 9) of 2 million tonne per annum at Ras in Rajasthan. The unit is expected to be completed by second quarter of 2012-13.The stock was trading in the green.