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Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
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Metals, realty stocks sink markets 
(Mon, 13 Jun 11:30 am) 
 
Indian stock market continued to trade in the red on the back of sell off seen in heavy weights over the last two hours of trade. Stocks from the metals and realty space are the biggest losers, while stocks from the healthcare and consumer durables space have lost the least.

The BSE-Sensex is trading down by 76 points while NSE-Nifty is trading 26 points below the dotted line. BSE Midcap index is down by 0.2% while the BSE Small cap index is trading 0.1% below Friday's closing. The rupee is trading at 44.85 to the US dollar.

Energy stocks are trading weak led by Reliance Industries Limited (RIL) and Castrol. As per a leading financial daily, Directorate General of Hydrocarbons (DGH) has refused to accredit three natural gas discoveries made by RIL at the KG-D6 block. DGH, which is the oil regulator, has rejected these blocks on the grounds of not being commercially exploitable on account of low reserves they may hold. This is because RIL and its Canadian partner Niko Resources have not provided results of tests done on individual wells to confirm the finds. It may be noted that RIL had made four gas discoveries, D-29, D-30, D-31 and D-34, in the KG-D6 block in 2008-09. The company had submitted a proposal in July 2009 to declare them as commercial. This would have enabled the company to firm up investment proposal for bringing the finds into production. Of these four discoveries DGH declared D-34 as commercial with an estimated peak production level of 14.68 mscmd over eight-year life of the field with US$ 2.3 bn investment in development. RIL in its proposal had estimated in-place reserves of 749 bn cubic feet in the three finds. As per the proposal, this would have required about US$ 877 m in investment to produce peak rate of 5.7 mscmd.

Engineering stocks are trading weak led by Ingersoll Rand and AIA Engineering. As per a leading financial daily, BHEL is keen to invest in power projects. The state owned power equipment maker is sitting on a surplus cash of Rs 90 bn. The company wants to put money in the joint ventures offering state generation companies equity in their power plants. It has already entered into four such joint ventures with states of Maharashtra, Madhya Pradesh, Karnataka and Tamil Nadu. It is looking at investing Rs 30 bn in these JVs over a period of four years. The power plants could be coal-based or gas-based. BHEL will pick up 25% equity in these projects while the remaining 75% would come from the state generation firms.

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