The major Asian stock markets have opened on a mixed note with stock markets in Korea(up 0.5%) and Japan (up 0.2%) leading the gains. However, the stock markets in Hong Kong (down 0.2%) and Indonesia (down 0.2%) were facing selling pressure.
Energy stocks have opened the day mainly in the red with Bharat Petroleum Corporation Ltd (BPCL) and Oil & Natural Gas Corporation Ltd (ONGC) leading the losses. As per a leading financial daily, with the development of three gas finds in Reliance Industries' KG-D6 block held up due to a technical dispute, the petroleum ministry is seeking Cabinet approval to relax timelines to allow the company retain and produce from the discoveries worth US$1.45 bn. In 2007, the company had notified the Dhirubhai-29, 30 and 31 and submitted a formal application for declaring them commercial in 2010. It was well within the timelines set in the production sharing contract. However, the ministry's technical arm Directorate General of Hydrocarbons (DGH) refused to recognize them in absence of prescribed confirmatory test. Finally when the firm agreed to do the drill stem test (DST), DGH declared that the contractual time period for development of the finds was over. The Petroleum ministry feels that taking these discoveries away where estimated reserves are 345 billion cubic feet and rebidding them may lead to a delay in the development. On the other hand, RIL can quickly put on production the three discoveries by using its existing infrastructure. Further, in case if RIL goes for arbitration, it may cause further delay in production and extra legal cost.
The gold imports for the month of June 2014 have grown by 65.13% to US$ 3.12 bn. The growth has come after seven months of decline in a row. The high imports have marginally pushed up the country's trade deficit to US$ 11.76 bn in June from US$ 11.28 bn in June 2013. It is important to note here that the government had imposed restrictions on inbound shipments of the gold to narrow the current account deficit (CAD). India's CAD had touched a historic high of 4.8 % of GDP in 2012-13, mainly due to rising imports of petroleum products and gold. A high CAD is likely to put pressure on the rupee, thus making imports expensive and raising inflation.