IT, oil & gas drag markets

Fri, 17 Jun 11:30 am

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Indian stock markets slipped into the red on the back of sell off in heavy weights over the last two hours of trade. Stocks from the IT and oil & gas space are trading weak, while stocks from the consumer durable and FMCG space are trading firm.

The BSE-Sensex is trading down by 44 points while NSE-Nifty is trading 11 points below the dotted line. BSE Midcap index is down by 0.1%, while the BSE Small cap index is down by 0.2%. The rupee is trading at 44.91 to the US dollar.

Automobiles stocks are trading mixed with Eicher Motors and Bajaj Auto leading the gains. However, Tube Investments and M&M are at the losing end. As per a leading financial daily, the 13 day employee strike at Maruti Suzuki's Manesar plant ended late night on Thursday. The workers are expected to resume work from Saturday. This was decided after the management agreed to take back the sacked employees. It may be recollected that 11 employees went on strike on June 4 to obtain acceptance for a newly formed employees union Maruti Suzuki Employees Union (MSEU). They were sacked two days later in a disciplinary action for inciting others to go on strike. The 13-day strike resulted in revenue loss to the tune of Rs 4.2 bn and production loss of 12,600 units. For each day of strike, Maruti will deduct 3 days of wages as penalty. However, there still is no clarity about recognition of the newly formed union. According to Haryana's labour minister, Shiv Charan Sharma the company management cannot deny formation of the union but the same will take longer. The workers will have to apply for it and get the approval from the Government.

Power stocks are trading mixed with NHPC and Tata Power trading firm, while PTC India Limited and NTPC are trading weak. As per a leading financial daily, the coal ministry has cancelled allocation of five coal acreages. These include three acreages allocated to NTPC. The reason given for cancellation was that the company was not serious in developing them. However, NTPC has argued that the company has completed more work on its blocks than other private firms whose allocation has not been revoked. However, the coal ministry has agreed to review their decision in response to the power ministry's request to reconsider their decision.

It may be noted that NTPC was given Chhati Bariatu (South), Chatti Bariatu and Kerandari blocks in Jharkhand. While Chatti Bariatu (South) was allocated in 2007, Chatti Bariatu and Kerandari blocks in North Karanpura coalfields were allocated in 2006. NTPC's 15,000-MW generation capacity addition is likely to get affected if the allocations are cancelled.