Indian equity markets started the day on a positive note and touched fresh record highs, after Goldman Sachs upgraded Indian shares to "overweight" from "marketweight" saying the cyclical macro adjustments have reduced external vulnerability. But the markets shed most of their morning gains in the afternoon session. FMCG and Power stocks were the biggest gainers. While the BSE-Sensex closed higher by 22 points, the NSE-Nifty closed higher by 12 points. BSE Mid Cap and the BSE Small Cap closed on a positive note.
As regards global markets, Asian indices closed in the green. European indices have opened in the red. The rupee was trading at Rs 61.12 to the dollar at the time of writing.
The upstream regulator, Directorate General of Hydrocarbon (DGH) has backed Oil and Natural Gas Corp (ONGC)'s demand for appointment of an international expert to assess if Reliance Industries Ltd (RIL) was drawing out any of its gas in the KG basin. According to ONGC, at least three wells drilled by RIL in the eastern offshore KG-D6 block are within few hundred meters of its gas fields and it fears the two may be sharing the same pool of reservoir. Since it has not yet begun producing from its side, ONGC feels RIL wells may be pumping out its share of gas. The DGH has asked RIL to immediately share data on the gas reservoir on its side of the block as well as production flows with ONGC.
Despite weakness in demand and subdued pricing, two of India's largest steelmakers, Steel Authority of India (SAIL) and Tata Steel Ltd, are moving ahead with capacity expansion. SAIL has started to conceptualize its new mega steel expansion for the next decade, even as its ongoing expansion remains incomplete, while Tata Steel is pushing ahead with its earlier stated expansion and even eyeing the next new venture. SAIL is planning US$ 26 bn expansion plan to take crude steel capacity to 50 million tonnes (MT) by 2020-25 from about 14 MT now. While the two largest steelmakers are justifying expansion plans, citing likely turnaround in demand, there is pessimism about capacity utilization levels based on the slow economic recovery and overcapacity owing to the expansion.