The Sensex today is down by around 116 points (0.6%), while the NSE-Nifty is down by around 39 point (0.7%). Mid and small cap stocks are also trading in the red with the BSE Mid Cap and BSE Small Cap indices down by around 0.5% and 0.4% respectively. The rupee is trading at Rs 54.2 to the US dollar.
Steel stocks have opened the day on a weak note with Adhunik Metaliks and JSW Steel leading the losses. As per a leading financial daily, India's leading steel manufacturer Tata Steel has inked a strategic pact with Labrador Iron Mines Holdings through its subsidiary Tata Steel Minerals Canada (TSMC). As per the agreement, the two companies will cooperate with each other in various aspects of their respective iron ore operations in the Labrador Trough. The agreement, which is worth 30 m Canadian dollars, includes transfer of 51% stake in the Howse deposit owned by the Canadian firm to TSMC. The Howse deposit is estimated to contain about 28 million tonnes (mt) ore reserves. TSMC could further raise its stake in the Howse deposit to 70% for an additional consideration of 25 m Canadian dollars. It is worth noting that the Labrador Trough is a 1,100-kilometre long, 160-kilometre wide iron ore bed in the Labrador-Quebec region in Canada. In the last half a century, the trough has delivered over 2 bn tonnes of ore. Leading global companies have made mining investments of US$ 15 bn in this region.
Food and tobacco stocks have opened the day on a firm note with Godfrey Phillips and ITC Ltd trading firm. As per a leading financial daily, food and tobacco major ITC Ltd has increased the prices of 74 mm size cigarettes by Rs 10 per pack. The prices have been increased to offset the impact of higher value-added tax (VAT) and excise duty on cigarettes. Post the Union Budget 2013, the VAT has increased on an average by 1.5%. At the same time, excise duty has been increased by 18%. The excise duty on cigarettes was hiked up to 21% last year. As a result, cigarette companies had increased prices up to 15%. In the Budget announced yesterday, the states of Assam and West Bengal increased tobacco taxes to 25% from 20% earlier. It must be noted that Assam and West Bengal account for 3% and 7% of ITC's volumes, respectively.