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Markets see sharp decline
Thu, 16 Oct Closing

After remaining close to the dotted line for most part of the day, the Indian equity markets saw a sharp fall in final hours of trade. While the BSE-Sensex today closed lower by 350 points, the NSE-Nifty closed lower by 116 points. Midcaps and Smallcaps too saw a similar trend today. While the BSE Mid Cap index closed the day lower by 2.4%, the BSE Small Cap index closed the day lower by 2.7%. Sectoral indices too closed the day on a negative note, with consumer durables and power stocks being the top losers today.

As regards global markets, Asian indices too closed on a weak note today with Japan leading the list of losers. The rupee was trading at Rs 61.47 to the dollar at the time of writing.

Power stocks have closed the day on a weak note with the losers being led by the stocks of Reliance Infra and Jaiprkash Power. As per a leading business daily, the stock of fuel at 103 coal based thermal power stations in India hit a new low in 25 years at 7.2 m tonnes. This is on the back of the fact that Coal India and its subsidiaries have once again failed to meet their production targets. This stock of 7.2 m tonnes of coal is made up of 6.6 m tonnes of indigenous coal and 706 tonnes of imported coal. In fact, reports suggest that even the country's largest thermal power producer National Thermal Power Corporation (NTPC) may currently have only 0-1 day of coal stocks at some of its plants, which makes the situation extremely precarious for electricity supply in the country.

Energy companie ended the day on a weak note. However, oil marketing companies namely Hindustan Petroleum Corporation Ltd (HPCL), Bharat Petroleum Corporation Ltd. and Indian Oil Corporation (IOC) registered strong intra-day gains after a fall in global crude prices. A fall in prices is likely to result in over-recovery. For diesel, the over recovery is likely to be Rs 3.56 per litre during the second half of October. The same was Rs 1.9 per litre in the previous fortnight. With the recovery burden coming down as OMCs are making profit on sale of diesel, government's subsidy share will also reduce. And this may help the exchequer to achieve its fiscal deficit target.

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