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Mid Caps buck the trend
Thu, 30 Aug 11:30 am

Indian equity markets continued to trade weak over the last two hours of trade. Capital goods and Oil and gas stocks witnessed maximum selling pressure, while realty and pharma stocks witnessed maximum buying interest.

The Sensex today is down by 72 points, while the NSE-Nifty today is down by 17 points. BSE Mid Cap index is up by 0.06% while the BSE Small Cap index is down by 0.10%. The rupee is trading at 55.68 to the US dollar.

Steel stocks are trading in the red led by Jindal Steel and Tata Steel. According to a leading financial daily, between June-July 2012, steel imports rose 40% to 1.47 million tonnes (mt) against imports of 1.01 mt in the same period last year. Flat steel products used in cars and consumer durables accounted for 63% of total imports. This comes on top of a 69% rise in imports to 1.52 mt in April-May 2012. This translates to a 55.7% jump in total imports to 2.99 mt between April and July 2012, compared to 1.92 mt in same period last year. Apart from China, imports are coming in from South Korea and Japan. The sharp rise in imports is due to higher volume of materials coming from countries like South Korea and Japan, with which India has comprehensive economic partnership agreements (CEPA). A differential rate of duty on steel imports from these countries is working as an incentive. Price fluctuation is also a factor that affects imports, particularly as domestic prices remain strong against import prices and there is fluctuation in domestic currency.

Mining stocks are trading weak led by Coal India and Gujarat NRE Coke. According to a leading financial daily, Coal India has speeded up its African plans now foreseeing a higher demand in future. As part of its plans to look for more overseas assets in a diplomatic route, the company has invited expression of interest from consultant firms in Africa to help the firm in coming up with a South African subsidiary, for which the last date is this week. Moreover, the firm has also speeded up the development plans of its Mozambique mines inviting a third tender for exploration which will close this month. The company had signed a memorandum of understanding with Limpopo province in South Africa in 2011, to jointly develop mines in that country.

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