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Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
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Down on global cues 
(Wed, 5 May 09:30 am) 
 
The Indian markets have started today's session on an extremely negative note. The benchmark indices opened below the breakeven mark and soon moved further into the red. They have not managed to pare their losses since then. Other key Asian markets are in the red with Indonesia (down 3.2%) leading the pack of losers. The US markets closed lower by 2% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading weak with construction, metal and auto majors facing the brunt of selling activity. The BSE-Sensex is trading lower by around 240 points, while the NSE-Nifty is down by about 70 points. Selling interest is also being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading lower by 1.9% and 2% respectively. The rupee is trading at 44.93 to the US dollar.

Energy stocks have opened the day on a negative note. Losers here include Petronet LNG and Indraprastha Gas. As per a leading business daily, the government has asked Reliance Industries to reduce its natural gas production from the KG basin D6 fields. The reason is that liquefied natural gas (LNG) imported by Petronet LNG is piling up at its terminal in Dahej, Gujarat. Some of Petronet LNG's customers, including three fertiliser plants and a NTPC power plant, have not taken delivery due to shut downs. It may be noted that LNG involves a process of converting gas into liquid, shipping it and then reconverting the liquid into gas. This makes it a costlier fuel than domestic source of natural gas. In our view, the high cost is a structural disadvantage of Petronet LNG's business and not merely a one time occurrence. As a high cost supplier, it will succeed only when it has long term off take agreements or when demand greatly outstrips supply in the spot market.

Engineering stocks have also opened the day on a negative note. Losers here include Alstom Projects and Engineers India. L&T has entered into a joint venture with England based Howden to design and manufacture axial fans and air pre-heaters for thermal power plants. The JV will invest around Rs 1 bn to set up the facility in Hazira, Gujarat. The facility is likely to commence operation next year. In our view, this is a positive development for the company as it will help access Howden's technology in the area of fans and rotary heat exchangers in the power sector, which it has been providing for several decades in more than 100 countries.

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Jul 21, 2017 (Close)

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