Bank, realty stocks drag mkts lower

Tue, 15 Oct 11:30 am

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After a positive start, the Indian stock markets shed the opening gains in the last two hours of trade. The decline was led by selling in banking and realty stocks.

The BSE-Sensex is trading down 116 points and the NSE-Nifty is trading down 44 points. The BSE Mid Cap index is trading down by 1.1% and BSE Small Cap index is trading down by 1%. The Rupee is trading at 61.7 to the US Dollar.

Aluminium stocks are trading negative today. Hindalco Industries is trading down 1.6% today. According to a leading business daily, Mr. Kumar Mangalam Birla, Promoter and Chairman of Hindalco Industries has been booked in the coal allocation scam. Mr Birla faces charges of cheating and conspiracy and will be called in for questioning by CBI. The investigating agency is likely to conduct raids at the Hyderabad, Mumbai and Bhubaneswar offices of Hindalco. CBI has alleged that Hindalco was wrongfully allocated the Talabira II coal block in Jasukuda district of Orissa in 2005. This coal block is a JV between Mahanadi Coalfields and Neyveli Lignite Corporation and was allocated to power 900 MW captive thermal power plant of Hindalco for its greenfield 'Aditya Alumina and Aluminium' Project in Orissa. A year ago, Mr Birla had assured shareholders and investors that none of the company's coal blocks were named in the coalgate scam and hence there will be no impact on the company's projects.

The coalgate scam had come to light in March 2012, when Comptroller and Auditor General (CAG) of India had reported that the country lost Rs. 1860 bn as the coal fields were allocated without a transparent bidding process.

Most IT stocks are trading higher today. Tech Mahindra and Wipro are among the stocks leading the gains. According to a leading business daily, India's leading IT training company NIIT Ltd has set in place a big expansion plan for its educational centers. NIIT currently operates about 600 centers all across the country and it plans to increase the number to 700 within a year. Besides the expansion, it will also upgrade all its centers as 'Cloud Campus'. This was an initiative launched by NIIT over a year ago which enables students to practice the lessons learnt in class from their homes or anywhere else while interacting with experts in real-time to resolve their difficulties.

For providing training to corporate executives, NIIT has tied up with ICICI Bank for the required training staff and the Indian Institutes of Management (IIMs) for developing the curriculum. Using their cloud based platform, NIIT hopes to provide need-based coaching to corporate executives especially in the banking and financial services sector. In 1QFY14, NIIT derived 25% of its sales from the corporate sector, 12% from schools and 67% from individual students. NIIT is trading down 0.2% today.