Across the board profit-booking saw Indian share markets slipping deeper in the red in the post-noon trading session. Barring IT and pharma, all the sectoral indices are trading in the red with realty and power stocks being the biggest losers.
All the mining stocks are trading in the red with Gujarat NRE Coke and MMTC Ltd being the biggest losers. As per a leading financial daily, Coal India's Ltd (CIL's) worker unions are against divestment of additional stake in the company or any of its subsidiaries as part of its restructuring to improve efficiency. However the unions have given indication that they are unlikely to oppose splitting of CIL's subsidiaries into independent companies. The previous Manmohan Singh government was compelled to halve its divestment target in the company to 10% following sharp protests from the unions. The divestment plan was finally abandoned. Nearly 90% stake in CIL is held by the government. The company's unions are awaiting the Centre's announcements on the sector before they formulate their future course of action. CIL stock is currently trading down by 0.8%.
As per a leading financial daily, India's current account deficit (CAD) fell steeply to 0.2% of the Gross Domestic product (GDP) for the March 2014 quarter. The fall has come on account of sharp restrictions imposed on gold imports. As per data from Reserve bank of India (RBI), gold imports plunged to one-third at $5.3 bn in March 2014 quarter from $15.8 bn in March 2013 quarter. The CAD fell to 1.7% of the GDP ($324 bn) in FY14 from 4.7% of the GDP ($87.8 bn), in the previous year. Although the CAD has reduced, the net outflow due to payment of dividend, interest and profit repatriation grew to $6.4 bn in FY14 from $5.2 bn, a year ago. This signals that the RBI will have to accumulate foreign exchange reserves in future to take care of the US dollar demand that is set to rise in future.