Markets weak on IT, metal stocks

Tue, 22 Jun 09:30 am

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The Indian markets have started today's session on a negative note. The benchmark indices opened at the breakeven mark but soon slipped into the negative territory. They have not managed to pare their losses since then. Other key Asian markets are also in the red with Japan (down 0.6%) leading the pack. The US markets closed lower by 0.1% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading weak with metal and software majors facing the brunt of selling activity. The BSE-Sensex is trading lower by around 60 points, while the NSE-Nifty is down by about 15 points. However, buying interest is being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.1% and 0.2% respectively. The rupee is trading at 45.82 to the US dollar.

Power stocks have opened the day on a negative note. Losers here include NHPC and CESC. As per a leading business daily, NPTC has formed a joint venture (JV) with the Asian Development Bank and Kyuden International Corporation, Japan for producing power from renewable sources. The JV plans to set up a capacity of 500 mega watts (MW) primarily from wind power and hydro electricity in three years. It will eventually look at setting up such plants abroad in future. NTPC will initially hold 50% in the JV and the other two partners will have 25% each. The development is part of NTPC's strategy of adding 1,000 MW of renewable power to its portfolio. It will help reduce its dependence on hydrocarbon fuel and better manage peak load. Besides, it will improve the company's green footprint and help it secure a better deal in the carbon credit market.

Steel stocks have opened the day on a negative note. Losers here include Tata Steel and SAIL. As per a leading business daily, Tata Steel's Rs 150 bn expansion plan of its Jamshedpur facility has received clearance from the environment ministry. The company has an annual capacity of 6.8 m tonnes (MT) at its Jamshedpur plant which it plans to raise to about 10 MT by March 2011. Besides Jamshedpur, the company is also working on the Orissa project where it plans to set up a 3 MT unit. It is also looking to install a 3 MT unit at Chhattisgarh. Overall, the company plans to take its annual steel capacity to 16 MT by 2014 at an investment of around Rs 400 bn. The projects will be funded by a mix of debt and internal accruals.