Indian stock markets traded weak during the previous two hours of trade on the back of selling activity witnessed mainly in IT and Oil and gas stocks that have high weightage in the indices. Besides the IT and oil & gas stocks, all sectors were trading in the green.
The BSE-Sensex is trading down by 61 points and NSE-Nifty is trading weak by 2 points. However, BSE Mid cap and BSE Small cap indices are trading strong by 0.8% and 0.3% respectively. The rupee is trading at 52.72 to the US dollar.
PSU stocks are mainly trading strong led by IDBI Bank and Union Bank. According to a leading financial daily, cash rich PSU companies may have to pay a minimum dividend of 30% this year. The announcement in this regard has already been made to the ministries of oil & gas, chemicals and infrastructure sector. This step is being taken by the government to deal with the high fiscal deficit for the year. With only 2.5 months left before the end of this financial year, the additional dividends declared by the PSUs may provide some relief. It may be noted here that usually the PSUs have been directed to declare a minimum 20% dividend on equity or at least 20% of post-tax profits whichever is higher.
Steel stocks are trading strong led by Tata Steel and JSW Ispat. According to a leading financial daily, the proposed joint venture between Steel Authority of India (SAIL) and Posco may be signed within a month. SAIL and Posco propose to set up a Rs 130 bn, 3 million tonne per annum (mtpa) steel plant through a joint venture at Bokaro in Jharkhand using Finex technology. Finex eliminates the first step in the steel making process of sintering and coking and allows for direct use of low cost iron ore fines and non-coking coal, thus bringing down overall plant installation and operational costs. Another advantage of Finex is the reduction of pollution, producing significantly less sulphur and nitrogen oxides than current blast furnaces.