Indian stock markets continue in red

Tue, 29 Nov 01:30 pm

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The Indian stock market continued to trade weak on account of selling pressure in heavyweights during the last two hours of trade. Stocks from the oil and gas, realty and software are leading the pack of losers while those from healthcare and auto space are finding investor favour.

The BSE-Sensex is trading down by 79 points while NSE-Nifty is trading 22 points below yesterday's closing. However, the BSE Mid Cap and BSE Small Cap indices are trading up by 0.1% and 0.2% respectively. The rupee is trading at 51.94 to the US dollar.

Most of the steel stocks have been trading in the red with JSW Ispat, Jindal Saw Ltd and Tata Sponge leading the pack of gainers. However, Tata Steel is trading firm. As per a leading financial daily, a seven member consortium led by Steel Authority of India Ltd (SAIL) has bagged the rights to mine iron ore at Hajigak in Afghanistan, which is said to contain the world's second-largest reserves of the mineral. The Indian firms have outbid global majors in this deal. Mr. Hamid Karzai, Afghanistan President has chosen the Indian consortium over other global firms for three out of four blocks in Hajigak that are estimated to hold more than 1.8 bn tonnes of iron ore. In the past, the Indian consortiums had failed to acquire overseas resources, losing out mainly to Chinese groups. This is the first time for an Indian consortium to successfully bid for a large mine. The consortium is expected to develop the mines, build a 7 m tonne steel plant and an 800 MW power plant. As per Afghan's mines ministry, the Indian syndicate will be allotted coking coal from Shabasha for steelmaking. SAIL has a 20% holding in the consortium. However, the stock of SAIL is trading in the red.

Public sector units (PSU) stocks have been trading in the red with Bharat Heavy Electricals Ltd (BHEL), Engineers India and Dena Bank leading the pack of gainers. However, Hindustan Petroleum Corporation (HPCL) and Canara Bank are trading weak. As per a leading financial daily, the Divestment Department is seeking views of various ministries if buy-back of shares could be a feasible option for mopping up resources from cash rich public sector entities such as Coal India, National Thermal Power Corporation (NTPC), Oil and Natural Gas Corporation (ONGC), Oil India and National Mineral Development Corporation (NMDC Ltd). The department is now considering mechanisms other than public share sales to achieve the disinvestment target of Rs 400 bn for the current fiscal. The poor market conditions have forced the government to give up plans of public share sales as a part of divestment strategy. Under the buyback route, the Government can raise money by selling part of its equity holding in the company to the central public sector enterprise itself. As per the sources, if the public sector entity in question is a listed entity, the buy-back of shares should be open to all shareholders of the listed company and cannot be selective only for Government holding.