Indian stock market indices traded weak over the last two hours of trade. Oil and Gas and FMCG stocks witnessed maximum buying interest, while Realty and Metal stocks witnessed maximum selling pressure.
Telecom stocks are trading in the red led by Bharti Airtel and Tata Teleservices. According to a leading financial daily, South Africa based Econet Wireless is seeking US$ 3.1 bn in damages from Bharti Airtel in a dispute over ownership of its subsidiary Airtel Nigeria. Econet's claim is that its 5% stake was unfairly cancelled when Zain took control, so any decision made since then without it, including the transfer to Bharti, is void. The Nigerian court upheld the claim. Bharti Airtel inherited the legal case as part of a US$ 9 bn acquisition of Zain's Africa operations in 2010, including 65% of Zain Nigeria. Econet had earlier disputed the buyout of Airtel's stake from Zain Nigeria in 2010 because its right of first refusal over the stake was denied.
Energy stocks are trading in the green led by Bharat Petroleum Corporation Limited (BPCL) and Reliance Industries. According to a leading financial daily, Hindustan Petroleum Company Limited (HPCL) is looking to increase its borrowing limit by Rs 100 bn to Rs 420 bn due to non-revision in prices of controlled petroleum products such as diesel and continued surge in crude oil price. Since there is a delay in the compensation of under recoveries by the government, the company is seeking shareholder's approval to increase borrowing limit from net worth plus Rs 200 bn to net worth plus Rs 300 bn. The company's net worth is Rs 120 bn. Even prices of petrol, a decontrolled product, have not been increased. Oil companies have an under recovery of Rs 12.31 on every litre of diesel, Rs 28.77 on kerosene and Rs 378 on cooking gas cylinder. Companies are also losing around Rs 3.2 on every litre of petrol.