Indian mkts sustain momentum

Thu, 11 Jul 11:30 am

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Indian share markets have remained buoyant in the last two hours of trade. Barring consumer durables, all other sectors are trading in green with metals and banking witnessing the maximum buying interest.

The BSE-Sensex is up by 410 points and NSE-Nifty is up by 127 points. BSE Mid Cap index is up by 1.1% and the BSE Small Cap index is up by 0.9%. The rupee is trading at 59.66 to the US dollar.

Barring Metals and Minerals Trading Corporation of India Ltd. (MMTC), other mining shares are trading in green with MOIL Ltd and Sesa Goa Ltd leading the gains. According to a leading financial daily, the shares of the second-largest Government-owned company, Coal India have hit new lows on fears of divestment at a discounted price, deteriorating fundamentals such as lack of growth in coal production, and a fall in global coal prices. Though the stock has corrected by nearly 30% over the last couple of years, two-third of its fall has taken place in the last six months. The current environment makes it very difficult for the Government, which owns 90% of Coal India to raise money from capital markets in order to meet its FY14 divestment target. The market is expecting the divestment to happen at a significant discount as has been seen in the cases of other PSU divestments. The Company' s production growth has been a mere 0.4% at 102.9 mt for the April-June quarter(1QFY14).Coal India's subsidiaries, Northern Coalfields (NCL) and Mahanadi Coalfields (MCL) have been mainly responsible for the production loss. Coal India's share is trading up by 4%.

All but three automobile shares, Force Motors, Maharashtra Scooters and Tube Investments are trading in green with Hero Motocorp and Escorts leading the gains. According to a leading financial news daily, The Supreme Court has asked automaker Tata Motors to consider returning 912 acres of land in Singur, West Bengal. In 2008, following violent protests against the factory by farmers led by the Trinamool Congress, Tata Motors pulled out of West Bengal and moved the plant to Sanand in Gujarat. The Court has asked the Company's counsel, Gopal Jain to be ready with an answer by August 6. Tata Motors holds a 90-year-lease for the land and claims to have paid compensation to 90% of the farmers. The state government has offered to pay back the compensation amount with interest to the Tata's in lieu of the land. The Supreme Court has also asked Tata Motors to consider alternate uses of the Singur industrial land that is with the Company. Tata Motor's share is trading up by 1.7%