Indian equity markets recovered from day's lows but were still trading in the red during the last two hours of trade. Sectoral indices are trading mixed. Metal and energy stocks are leading the losses while healthcare and auto stocks are trading strong.
The BSE-Sensex is trading lower by 76 points and NSE-Nifty is trading lower by 26 points. However, BSE Mid Cap and BSE Small Cap indices are trading higher by 0.2% and 0.3% respectively. The rupee is trading at 56.88 to the US dollar.
Mining stocks are trading in the red led by Sesa Goa and Coal India. According to a leading financial daily, the coal ministry is likely to push for dilution in coal supply pact today in its meeting tomorrow at the Prime Minister's Office. The ministry will ask for revised fuel supply agreements (FSA) whereby Coal India will have to ensure 65% of the contracted supply for the first 3 years, 72% for the fourth year and 80% for the fifth year. We may recollect here that as per a Presidential directive, Coal India had earlier been asked to ensure and supply minimum 80% of the requirements of the power sector. There is a proposal to increase the penalty level too form the current 0.01% of the value of shortfall.
Energy stocks are trading in the red led by Cairn India and Reliance Industries. According to a leading financial daily, Reliance Industries has decided to sell its textile business along with its iconic brand "Only Vimal". The Mukesh Ambani company has given the task of managing the sale to NM Rothschild. The sale will include its Naroda factory and will be completed by the end of this year. We may recollect here that the textile business was set up by Late Dhirubhai Ambani. The Reliance group has since then diversified into energy and petrochemicals business. However, textiles now contribute less than Rs 20 bn to the overall revenues. This step is in sync with the management's decision to exit loss making business which in this case is Only Vimal.