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IT stocks drag the indices
Thu, 3 Mar 09:30 am

Asian markets have opened the day in an upbeat mood. Almost all the major markets are trading in the green. Korea (up 1.5%), Singapore (up 1.0%) and Malaysia (up 0.7%) are the leading gainers. Profit booking, however, has led the Indian markets to open in the negative. IT and metal stocks are the biggest losers.

The BSE-Sensex is trading lower by around 127 points (0.7%), while the NSE-Nifty is down by around 16 points (0.3%). Midcap and small cap stocks are trading in the negative as well, with the BSE Midcap and BSE Small cap indices down by about 0.3% each. The rupee is trading at 44.98 to the US dollar.

Steel PSU, Steel Authority of India (SAIL) is all set to use the undeveloped land of Fertiliser Corp of India. The company is waiting for the terms of use from the government before it ventures out to utilize the 6,500 acres of Fertiliser Corp at its Sindri unit in Jharkhand. The land would be used for building a steel plant as per the management of SAIL. The steel plant can be integrated with SAIL’s plant at Bokaro, which is nearby, and can also use the ore from the nearby mine at Gua. The cost of building the 5 m tonne steel plant is estimated to be around Rs 220- 230 bn. The Sindri project is one of the three future growth options being considered by SAIL. The other two include a joint venture with POSCO and the revival of the erstwhile Malavika Steel at Jagdishpur. However, the Sindri deal is subject to liberal terms from the Government. ArcelorMittal is also rumored to have approached the government for a steel plant at the same site.

Auto stocks have started the day on a mixed note with Hero Honda and Bajaj Auto trading firm. However, Ashok Leyland and Tata Motors are witnessing selling pressure. Most Indian auto makers registered higher vehicle sales for the month of February. Auto sales have benefitted from the introduction of new vehicles, easier availability of loans and higher personal incomes. Moreover, the February sales were higher also because customers advanced purchases on the expectation that prices would increase in March. It may be noted that the auto industry was expecting the government to raise excise tax in the Union Budget 2011-12. But the tax was left unchanged at 10%.

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