Indian equity markets languished in the red throughout the trading session today on the back of persistent selling activity across index heavyweights. Although the morning session saw some attempts to move towards the dotted line, these proved futile as profit booking immediately took over. There was no respite in the final trading hour either and the indices closed well into the red. While the BSE-Sensex today closed lower by 114 points, the NSE-Nifty closed lower by 41 points. The BSE Mid Cap and the BSE Small Cap index were not spared either as both closed marginally lower. Losses were largely seen in oil and gas and banking stocks.
As regards global markets, Asian indices closed mixed today while European indices have opened in the red. The rupee was trading at Rs 59.34 to the dollar at the time of writing.
Most auto stocks closed in the red today with the key losers being Ashok Leyland, Maruti Suzuki and Bajaj Auto. As per a leading business daily, production at Bajaj Auto's Chakan plant at Pune seems to be improving and is now close to 50% of normal as stated by the company's MD Mr Rajiv Bajaj. The company produces 3,000 motorcycles at Chakan on a normal day and yesterday 1,400 units were produced. Workers at the plant have been on strike since the last week and have put in demands of rise in wages as well as subscription to 500 equity shares of the company at Rs 1 per share. The strike caused a production loss of 20,000 units in June 2013. It must be noted that strikes at auto plants have increased in recent times. The worst such incidence was at Maruti's plant at Manesar last year where because of riots and violence, a lockdown had to be declared at the plant. Hero Motocorp was also at the receiving end at the start of the year when it was faced with labour issues at its plant in Gurgaon. Indeed, these labour troubles come at a trying time for the auto industry which is already bogged down by the economic slowdown and poor growth in sales volumes.
Power stocks closed mixed today. While Neyveli Lignite and JSW Energy found favour, National Thermal Power Corporation (NTPC) and Tata Power closed in the red. As per a leading business daily, the government may stop accepting fresh applications from power plants seeking coal supply for the next two years. This is because of acute coal shortage. Subsidiary companies of Coal India Ltd (CIL) have issued 176 letters of assurance (LOAs) covering about 108,000 MW power generation capacity. During the last 3 years, a capacity of 26,000 MW has been commissioned. The balance capacity of more than 80,000 MW is likely to be commissioned during the next 5 years. Because of this huge demand-supply mismatch, receipt of fresh applications for LOAs from the power sector could most likely be kept on hold. CIL has already been told by the government to ensure coal supply to plants commissioned between 2009 and 2015. It will supply 65% of the power projects' requirements from domestic mines and will import another 15%.