No respite for Indian indices

Wed, 13 Mar Closing

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Indian equity markets languished in the red throughout the trading session today. The indices began the day's proceedings on a weak note and persistent selling activity across index heavyweights in the subsequent hours pushed them further into the negative territory. There was no respite in the final trading hour either and the indices closed well below the dotted line. While the BSE-Sensex closed lower by 202 points, the NSE-Nifty closed lower by 63 points. The BSE Mid Cap and the BSE Small Cap were not spared either and closed lower by 1% each. Losses were largely seen in banking and auto stocks.

As regards global markets, most Asian indices closed weak today while European indices have also opened in the red. The rupee was trading at Rs 54.31 to the dollar at the time of writing.

Energy stocks closed weak today and the key losers were Indraprastha Gas, Essar Oil and Gas Authority Of India Ltd. (GAIL). As per a leading business daily, Gas Authority of India (GAIL) Ltd will look to swap gas in the international market by FY16, once it starts transporting shale gas from its assets in the US. It must be noted that at present, the company already has presence in the US through a 20% stake in Carrizo Oil's shale gas assets in Texas. Further, GAIL had signed a memorandum of understanding with EDF Trading to jointly acquire and develop upstream oil and gas assets in North America. By FY16, the company expects large pipelines and LNG (liquefied natural gas) terminals to be in place. Till then it would be importing gas from the US. In the event that these terminals do not come up by that time and the Indian market is unable to absorb the gas imported, then GAIL would look to swap it in the international markets. It must be noted that according to projections by the petroleum and natural gas ministry, India's gas demand is likely to touch 473 m standard cubic meters per day (mmscmd) by FY17. This has prompted Indian energy firms to look for more acquisitions in the overseas market.

Auto stocks also closed in the red today and the key losers were Bajaj Auto, Maruti Suzuki and TVS Motors. As per a leading business daily, Tata Motors reported its global sales volumes for the month of February 2013. Total volumes fell by 22% YoY largely led by the substantial drop in volumes of passenger vehicles in the domestic market. The only silver lining in the cloud was that Jaguar Land Rover (JLR) sales were up 10% YoY. In the domestic market, passenger vehicle volumes plunged 70% YoY. The slide in volumes of commercial vehicles was much lower at 9.8%. Because of the very poor showing of the passenger vehicles segment, the company's market share here fell to its lowest level of 4.9% during the month. Intense competition and overall slowdown in the auto market in India took its toll on volumes. In the medium and heavy trucks segment, however, the company's market share inched upwards to 52.9% for the month. The company intends to strengthen its dealer networks among other things to bolster volumes of passenger vehicles going forward. The stock of Tata Motors also closed lower today.