Metal stocks push markets lower

Wed, 30 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 plunged into the negative territory. However, they have managed to cut their losses since then. Other key Asian markets are in the red with Japan (down 2.1%) leading the pack of losers. The US markets closed lower by 2.7% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading weak with metal and construction majors bearing the brunt of selling activity. The BSE-Sensex is trading lower by around 40 points, while the NSE-Nifty is down by about 10 points. Selling interest is also being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading lower by 0.2% and 0.1% respectively. The rupee is trading at 46.2 to the US dollar.

Energy stocks have opened the day on a negative note. Losers here include Indraprastha Gas and Gujarat Gas. As per a leading business daily, ONGC and its partners will sign the production sharing contracts today for half of the 34 oil & gas blocks awarded in the latest round of auction under the New Exploration Licensing Policy (NELP). Of the 70 blocks offered in NELP-VIII, only 36 had attracted bids from companies. ONGC and its partners had bagged 17 blocks - 14 as the operator and 3 as non-operator. In the previous seven rounds too, ONGC had won almost half of the 203 blocks awarded. At a time when India desperately needs foreign capital and technology in oil and gas exploration, the NELP auctions have received a lukewarm response due to lack of clarity on taxation issues. The dispute between the Ambani brothers had also raised question marks on production sharing contracts.

Telecom stocks have opened the day on a negative note. Losers here include Bharti Airtel and Reliance Communications. As per a leading business daily, Bharti Airtel will invest US$ 100 m over the next three years to expand in Gabon. It is one of the countries where the company gained a foothold following its US$ 10.7 bn acquisition of Zain Telecom's assets in Africa earlier this year. The capex will go towards expanding the network deeper into the markets and launching innovative products like wireless broadband and m-commerce. Earlier this month, Bharti completed its acquisition of the Africa assets of Kuwaiti cellphone operator Zain in one of the largest cross-border deals in Indian history. The company is looking at penetrating the rural markets of most of the 15 African countries it has now entered. It has already announced similar investments in Zambia, Malawi and Uganda.