Indian equity markets open flat

Thu, 14 Jun 09:30 am

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Asian equity markets have opened the day on a mixed note. While markets in Taiwan (up 0.3%) and South Korea (up 0.1%) are trading in green, markets in Hong Kong (down 0.5%), China (0.3%) and Singapore (down 0.3%) are witnessing selling interest. The Indian equity markets have opened flat. Amongst the sectoral indices, consumer durables and software stocks are leading the gains while banking stocks and Capital goods are trading weak.

The Sensex today has opened down by around 10 points (0.1%), while the NSE-Nifty India is down by around 7 points (0.1%). However, mid and small cap stocks are witnessing buying interest with the BSE Mid Cap and BSE Small Cap indices up by around 0.2% each. The rupee is trading at Rs 55.73 to the US dollar.

Energy stockshave opened the day on a mixed note with Oil India Ltd. and Oil and Natural Gas Corporation (ONGC) leading the losses and Gujarat Gas and Gas Authority of India Ltd (GAIL) leading the pack of gainers. As per a leading financial daily, ONGC plans to invest around Rs 4.4 bn to drill 40 oil and gas wells in the Krishna - Godavari basin (KG basin) in the next financial year. Currently, the proposal is with the Ministry of Environment and Forests for clearances. The onshore wells are located at East Godavari, West Godavari and Krishna districts of Andhra Pradesh. As per the company, the three districts have two blocks with estimated reserves of 1,000 million metric tonnes of oil or oil equivalent gas. These wells are from the nominated block assigned to the company before New Exploration Licensing Policy (NELP) came into existence. As per the company official, most of the Petroleum Exploratory Licences (PEL) in the nomination blocks will expire in 2013.ONGC has already applied for conversion of some the PEL areas to mining leases.

Mining stocks have opened the day on a positive note .Barring Manganese Ore India Ltd. (MOIL), all the stocks are trading in the green led by Sesa Goa and AshaPura Minechem Ltd. As per a leading financial daily, public sector mining giant Coal India Ltd (CIL) has halted its initiatives to acquire foreign assets. It has discontinued dialogues with all foreign companies. Moreover, it is reported that the company neither intends to initiate any fresh talks, nor does it plan to invite any fresh expressions of interest. On account of this stance, coal mines and assets that were offered to CIL are now being offered to other international firms for likely takeovers. The reason why CIL has stopped talks with foreign companies is that the coal ministry has mandated a 12% internal rate of return for all investments it undertakes in acquiring overseas assets. Since the assets that CIL was planning to acquire did not meet these requirements, the company had to discontinue talks.