Indian share markets open flat

Tue, 4 Dec 09:30 am

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The major Asian stock markets have opened the day on a weak note with stock markets in Japan (down 0.3%), China (down 0.4%) and South Korea (down 0.4%) leading the losses. The Indian share market indices have opened the day on a flat note with a negative bias. The sectoral indices are trading mixed with stocks in the software and FMCG space leading the losses. However, the stocks in the energy and power sector are leading the gains.

The Sensex today is down by around 8 points (0.0%), while the NSE-Nifty is trading down by around 2 points (0.0%). However, mid and small cap stocks are trading in the green with the BSE Mid Cap and BSE Small Cap indices up by around 0.5% and 0.6% respectively. The rupee is trading at Rs 54.86 to the US dollar.

Energy stocks have opened in the green with Oil and Natural Gas Corporation Ltd (ONGC) and Bharat Petroleum Corporation Ltd (BPCL) leading the pack of gainers. As per a leading financial daily, the oil ministry is poised to approve Reliance Industries' (RIL) investment plans for the KG-D6 block. As per the government sources, this may set stage for reversing the sharp decline in output by developing new fields. It is important to note here that the approvals to the company's investment plans were held up for years on account of the differences over the block's audit by the Comptroller and Auditor General (CAG) of India. As per the officials, the ministry is now expected to grant approvals as RIL has accepted the condition to cooperate in the CAG's audit of the block. This development will help RIL to develop the satellite fields and the R-series wells of the D6 block that have a potential to produce around 15 million cubic metres of natural gas by 2015-16. As per the ministry officials, the government would also allow the company to invest US$1 bn for ramping up output from the block.

Barring Sanofi India, MNC Pharmastocks have opened the day on a firm note with Abbott India and Pfizer leading the gains. As per a leading financial daily, the government has said that all foreign investments in existing pharmaceutical companies would be cleared by the Foreign Investment Promotion Board (FIPB) till Competition Commission of India (CCI) Act is amended. This will be done to ensure availability of medicines at affordable prices. The decision is likely to bring relief to overseas investors. The decision was taken in a meeting that was called to decide on two important issues - the limit upto which foreign companies will be allowed to acquire shares in a domestic company and the role of CCI in mergers and acquisitions. While finance ministry wants only cases involving FDI beyond 49 % in units to be considered by FIPB, the commerce ministry wants all foreign investments in pharma units to be approved by FIPB. The government has taken up the issue post the acquisition of big Indian pharma companies by foreign companies. The domestic industry is concerned that the entry of foreign players in the Indian market may impact the availability of generic medicines as the overseas companies would focus on costly patented medicines.