The Indian markets have started todayís session on an extremely negative note. The benchmark indices opened at the breakeven mark but soon plunged into the red. They have not managed to pare their losses since then. Other key Asian markets are in the red with Japan (down 4%) leading the pack of losers. The US markets closed lower by 3.2% last Friday.
Currently in India, heavyweights from the BSE-Sensex are trading weak with metal, construction and auto majors facing the brunt of selling activity. The BSE-Sensex is trading lower by around 380 points, while the NSE-Nifty is down by about 115 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 2% each. The rupee is trading at 46.88 to the US dollar.
Energy stocks have opened the day on a negative note. Losers here include Cairn India and Reliance Industries. As per a leading business daily, GAIL is set to start work on the 800-km pipeline to transport gas from the LNG terminal in Dabhol to Bidadi near Bangalore from July this year. The pipeline will have a capacity to carry 16 m standard cubic meters of gas per day in the first phase. Liquefied natural gas will be imported from abroad and then pumped under high pressure through the pipeline. It will also have a provision for connectivity with the KG basin via Gulbarga, Bijapur spurline. The company will spend Rs 20 bn in FY11 to lay the pipeline. The total cost of the project is estimated at Rs 50 bn and is likely to be completed by March 2012. This is part of a memorandum of understanding between GAIL and the Karnataka government to manage the city gas distribution projects in the state. In fact, of the 5,000 km of pipeline that GAIL is currently laying down, 2,500 km will be in Karnataka.
Engineering stocks have opened the day on a negative note. Losers here include Punj Lloyd and Havellís. BHEL has set up a taskforce through which it plans to seek a green channel for speeding up transit of consignments bound for power projects, through inter-state borders. The task force will take up the idea to the ministry of surface transport. This step will help speed up the execution of power projects across the country. The speed at which the Indian power sector is growing means that there is no longer time for setting up infrastructure like setting up a rail link and construction has to start almost as soon as the land for the project is acquired. Hence, road transport is the only option. In fact, now almost 80% of the consignments are transported by road particularly in the case of greenfield projects.