Software stocks pull down markets

Tue, 9 Aug 01:30 pm

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The Indian stock market continued with its loss recovery mode over the last two hours of trade. And while the Sensex did move into the positive, the stay was short lived and the index plunged back into the negative. Stocks from the software, healthcare, metal and oil & gas are trading weak while those from the FMCG and auto are trading in the green.

The BSE-Sensex is trading down by 128 points while NSE-Nifty is trading 47 points below yesterday's closing. BSE Midcap and BSE Small cap indices are down by 0.8% and 1.1% respectively. The rupee is trading at 45.17 to the US dollar.

Most of the steel stocks have been trading in the red with Jindal Saw Ltd, Tayo Rolls and Tata Steel leading the pack of losers. However, Maharashtra Seamless is trading firm. As per a leading financial daily, Steel Authority of India (SAIL) is planning to raise at least Rs 2.5 bn via 10-year and 15-year bonds. It has called for bids in the 8.9-9.3% range for the 10-year bonds and in the 9.1-9.4% for the 15-year bonds. The bids are to be submitted on August 10 and the pay-in date is 17 August. The issue has been rated 'CARE AAA' by CARE and 'AAA (ind)' by FITCH. Recently, the company had planned to form a joint venture with National Fertilisers Ltd (NFL) for its proposed Rs 44.5 bn urea manufacturing plant at Sindri, Jharkhand, in which it will retain the majority stake. However, nothing concrete has been yet decided in that regard. Depending on the outcome of the detailed project report (DPR), the shareholding pattern of the proposed venture would be worked out on a later date. The company received the Cabinet Committee on Economic Affairs' nod for its plan to set up plants for manufacturing of steel and fertiliser and generation of power at the closed Sindri facility of erstwhile Fertiliser Corporation of India. The company plans to invest around Rs 350 bn to set up 5.6 mtpa steel making plant, 1.15 mtpa fertiliser plant and a power plant of suitable capacity. The stock of the company is trading weak.

Power stocks have been trading mixed with Reliance Power, Reliance Infrastructure and CESC Ltd leading the pack of losers. However, PTC India, Torrent Power and GVK Power are trading firm. PTC India has reported results for the first quarter of FY12 (1QFY12). The company has reported a 62.7% year on year (YoY) surge in the bottomline. The total income for the company however, was down 9.8% YoY. As per the company filing, the service charges of Rs 91 m (versus last year charges of Rs 48m) have been recognized as income for sale and purchase of electricity through energy exchanges.

PTC India is engaged in the business of trading activities that includes long term trading of power generated from large power projects as well as short term trading in India. The company has got an equity capital of Rs 2.9 bn. It is mainly engaged in providing power trading solutions. Its main focus is to develop a commercially vibrant power market in the country.