Indian stock markets open in the red

Mon, 23 Sep 09:30 am

   Previous Close   

   Pre-Open   

   11:30 am   

   01:30 pm   

   Closing   

The major Asian stock markets have opened the day on a mixed note with stock markets in China (up 0.8%) and Taiwan (up 0.9%) leading the gains. However, the stock markets in Singapore (down 0.8%) and Indonesia (down 0.8%) were leading the losses. The Indian stock market indices have opened the day on a weak note. The sectoral indices have opened on a mixed note with healthcare, software and consumer durables seeing gains while stocks in the banking/a< and realty space leading the losses.

The Sensex today is down by around 143 points (0.7%), while the NSE-Nifty is down by around 49 points (0.8%). Midcap stocks have also opened in the red with the BSE Mid Cap index down by around 0.4%. However, small cap stocks have opened in the green with the BSE Small Cap index up by around 0.1%. The rupee is trading at Rs 62.44 to the US dollar.

Steel stocks have opened the day on a mixed note with Adhunik Metaliks Ltd and Steel Authority of India Ltd (SAIL) leading the gains. However, Tayo Rolls Ltd and Jindal Saw Ltd were facing selling pressure. As per a leading financial daily, SAIL is planning to invest around Rs 8 bn for developing an iron ore mine in Bhilwara, Rajasthan. Besides development of the mine, SAIL is also planning to set up a pellet plant with a capacity of 2 million tonne per annum (mtpa) at the site. The mine is spread over 871 hectare with estimated reserves of around 150 MT. As per the management, the firm hopes to produce 5 mtpa from the mine. SAIL will seek clearances post getting the Letter of Intent (LoI) from Rajasthan government. The production from the mine is expected to start in 3-4 years. The Bhilwara mine is expected to help SAIL meet its increased iron ore need as the company raises its steel-making capacity to 24 mtpa by next year from 14 mtpa at present. It normally needs 1.6 tonnes of iron ore for producing every tonne of steel.

Telecom stocks have opened the day on a mainly in the red with AGC Networks Ltd and Bharti Airtel Ltd leading the losses. As per a leading financial daily, leading mobile phone companies like Bharti Airtel Ltd , Idea Cellular Ltd and Reliance Jio Infocomm are targeting auctions for bandwidth in the 700 MHz band instead of the lesser efficient1800 MHz band. The auctions are likely to happen in 2014.As per the daily, Idea Cellular is aiming for a lower frequency band since it will help the company tap rural space (accounts for 60% of revenues) even better. Besides, the lower frequency is likely to offer Idea Cellular better speed to launch basic internet connectivity in these areas. It is important to note here that airwaves in the 700 MHz band is considered the more efficient than 900 MHz and 1,800 MHz band since it consumer lesser capital expenditure to roll out services. Since most telecom companies are currently cash constrained, they are expected to be cautious in the upcoming 1800 MHz auctions that needs much higher capital expenditure.