Indian equity markets anguished in the red throughout the trading session today. The indices began on a weak note and subsequent sessions saw them slip further into the red. Although buying activity was seen post noon, it was not enough to push the indices above the dotted line. While the BSE-Sensex today closed lower by 79 points, the NSE-Nifty closed lower by 23 points. However Smallcaps and midcap were in favour. The BSE Mid Cap and BSE Small Cap indices closed higher by 1.84% and 1.34% respectively. Majority of sectoral indices closed in green with realty and software stocks being the leading gainers. Stocks from banking and capital goods were the leading losers for the day.
As regards global markets, Asian indices closed mixed today while European indices have opened weak. The rupee was trading at Rs 58.82 to the dollar at the time of writing.
Mining stocks have closed the day on a mixed note. Metals and Minerals Trading Corporation of India Ltd. (MMTC) and MOIL ended the day with strong gains while Hindustan Zinc closed in the red. With a decisive government coming to power at the Centre news about reforms getting a kick start have started making news. As per an article in Economic times, it is believed that the new PM designate Narendra Modi will start his reform drive by breaking up Coal India. Power scarcity is a major issue in our country despite India having the fifth largest coal reserves. This has led to higher imports despite having sufficient huge coal reserves in our homeland itself which have increased the cost of power.
As such, it is believed that Mr Modi will begin his reform process with Coal India. One possibility doing rounds is that the company will be broken up into various independent separate divisions and the respective state governments would be made equity owners in those entities. While many such theories have been floating since the last few days any decision is expected to be taken only after thorough consultation. It would be interesting to see what decision the new government takes in these regards.
Energy stocks have closed the day have closed on a mixed note. Essar oil and Mangalore refinery petroleum ltd (MRPL) were the leading gainers. However, Gas Authority Of India Ltd. (GAIL) and Hindustan petroleum corporation Ltd (HPCL) ended the day in the red. As per the financial daily, HPCL a state owned company is expected to buy stake in Petronet LNG. The company is looking to buy 11%-15% stake in the later company for Rs 50 bn. Reportedly, HPCL's vizag refinery at Andhra Pradesh is being expanded to 15 million tones per annum (MTPA) to 8.33 MT. Petronet, India's largest importer of liquid gas, is building a 5 MTPA LNG terminal at Gangavaram in Andhra Pradesh that is expected to be ready by 2018. Further, the Petronet director RK Garg, who confirmed the interest of HPCL for buying the stake. As per Mr Garg the discussions are still going on, HPCL's Vizag refinery has a requirement for gas and Petronet is also looking for strategic partner. So this will be a win-win situation.