While the Indian equity markets continued to languish in the red during the previous hour of trade, they did shed a significant portion of the losses in the process. While stocks from the Oil and gas and capital goods spaces seem to be in favour, those from the consumer durables and FMCG spaces are amongst the top underperformers at the moment.
The Sensex today is trading lower by about 80 points, while the NSE-Nifty is trading lower by about 25 points. The BSE Mid cap and BSE Small cap indices are trading lower by 0.7% and 0.6% respectively. The rupee is trading at 55.56 to the US dollar.
Retail stocks are currently trading mixed with Titan Industries and Bata India trading weak, while Pantaloon Retail and Trent are trading firm. The stock of retail major Pantaloon Retail is trading higher on the back of news of the company's raising about Rs 5.6 bn by selling its 53.7% stake in Future Capital Holdings (FCH). As per a leading business daily, Pantaloon has sold this stake at Rs 162 a share (an 18% premium to FCH's closing price at the end of last week). The company is believed to have sold 40% stake as part of the first tranche. The company will sell the balance as part of the second tranche. Pantaloon has sold this stake to US private Equity firm Warburg Pincus LLC. This move is part of Pantaloon's strategy to reduce the debt on its books and in turn improve its cash flows. The company is believed to have a debt of Rs 58 bn on its books.
Mining stocks are currently trading weak led by Sesa Goa and National Mineral Development Corporation (NMDC). As per a leading financial daily, mining company Coal India (CIL) has allowed flexibility to its subsidiaries with respect to its rehabilitation & resettlement (R&R) policy 2012. The policy allows subsidiaries to modify the R&R terms within broad framework to expedite land acquisition for mining projects. The policy has also raised the compensation amount from Rs 0.2 m to Rs 0.5 m per acre of land acquired in lieu of employment. The subsidiaries have the freedom to modify the employment terms and decide on the annuity payment terms. In FY12, the company produced 435.8 m tons of coal, marginally higher than 431.3 m tons of production in the previous year. However, the production fell short by 11.2 m tons against the target of 447 m tons set in the beginning of the financial year. The company has set a coal production target of 464 m tons for FY13.