Indian equity markets open in green

Wed, 20 Jun 09:30 am

   Previous Close   

   Pre-Open   

   11:30 am   

   01:30 pm   

   Closing   

Most of the Asian equity markets have opened the day on a positive note with markets in Indonesia (up 0.7%), Hong Kong(up 0.4%) and Japan (up 0.7%) leading the gains in the region. However, markets in China (down 0.1%) were trading in red. The Indian equity market indices have opened the day on a positive note. Sectoral indices are trading mixed with stocks in the Consumer Durables and Power space leading the gains while stocks in the Software and realty sectors are witnessing selling pressure.

The Sensex today is up by around 29 points (0.2%), while the NSE-Nifty is up by around 7 points (0.1%). Mid cap stocks and Small cap stocks are trading in the green as well with the BSE Mid Cap index and BSE Small Cap index up by around 0.3% each. The rupee is trading at Rs 55.95 to the US dollar.

Mining stocks have opened in the green with Sesa Goa and Ashapura Minechem Ltd leading the gainers. As per a leading financial daily, Coal India Ltd (CIL) has been allocated 116 mines by the Government for expansion to help it increase its production capacity. The company has plans to take production capacity to 556 million tonnes (MT) by 2016-17 and is in the process of earmarking about Rs 300 bn for capacity expansion during the 12th Five-Year Plan (2012-17) period. The company had asked for 138 mines but was told by Coal Ministry to recast its plans. In a separate news, CIL may witness a 7% hike in wage cost this year on account of a hike in dearness allowance. As a result, the salary bill is expected to go up by Rs 17.5 bn. It is to be noted that a hike in dearness allowance burden (from 27% to 50% of basic pay) was prime reason of a 30% price hike in 2011.The stock is trading in the red.

Cement stocks have opened the day on a negative note with Ambuja Cement and Madras Cement leading the losses. As per a leading financial daily, the Competition Commission of India (CCI) is likely to impose a fine of about Rs 30 bn on major cement players for alleged cartelisation and price manipulation. The order is expected to be announced in a few days. A certain top official of CCI has said that the competition watchdog had the power to impose a fine of 10% of the average three year turnover of the company. However, the penalty for cement players is likely to be in the range of 5-8% of the last three year's average turnover. The main reason for the likely lower fine is the overall sluggishness in the economy and cement being an important input in key sectors. Cement players are taking refuge in the fact that cartelisation is always difficult to prove on account of a lack of solid evidence. The allegations of the CCI are mostly based on circumstantial evidence.