Indian share markets extend losses

Thu, 21 Jun 01:30 pm

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Selling pressure intensified in the Indian share markets with the indices falling further below the dotted line in the last two trading hours. Most of the sectoral indices are trading negative with IT, banking and metal stocks being the biggest losers. Power and consumer durable stocks are trading flat.

The BSE-Sensex is trading down 56 points and NSE-Nifty is trading down 15 points. BSE Mid Cap index and BSE Small Cap index are trading down by 0.2% and 0.3% respectively. The rupee is trading at 55.9 to the US dollar.

As per a leading financial daily, the switch-over from analogue to digitized cable signals has been deferred by four months from 30th June to 31st October 2012. The digitization deadline which was to become effective in metropolitan cities of Delhi, Mumbai, Calcutta and Chennai was postponed as only 30% of households had acquired the Set Top Boxes, a must-have for receiving digitized signals. The Information & Broadcasting Ministry wants to achieve digitization of cable services in the entire country by December 2014. The much awaited compulsory digitization is expected to help television media companies like Zee Entertainment get access to actual number of subscriptions. In the absence of digitized services, cable operators under report these numbers to the media companies thereby impacting their revenue.

Majority of the engineering stocks are trading positive with Everest Kanto and Lakshmi Machine being the biggest gainers. As per a business daily, power generation equipment for projects above 1,000 MW may attract import duty at the rate of 19%. If the proposal is approved, it will give domestic equipment manufacturers such as Bharath Heavy Electricals Limited (BHEL), Larsen and Toubro (L&T) and ABB a major boost. At present, power generation equipment for projects below 1,000 MW bears a duty of 5% while there is almost nil duty on equipment for projects above 1,000 MW. Domestic equipment manufacturers allege that there is no level playing field. Foreign machines are cheaper by up to 14%. This is hurting the local players' investment and capacity expansion plans. In the absence of the import duty, it is believed that domestic power equipment manufacturers like BHEL may find some of their capacity lying idle during the Twelfth Plan period. However, power producers fear that this may lead to stiff rise in tariffs. While the requirement for power is high, margins are thin. Hence, any price increase will have to be borne by the end-user. The stocks of L&T, ABB and BHEL are trading higher on the bourses by nearly 2%.