Indian equity markets continued to trade weak over the last two hours of trade on back of heavy selling pressure witnessed across industry heavyweights. Oil and gas and banking stocks witnessed maximum selling pressure.
Steel stocks are trading in the red led by JSW Steel and JSW Ispat. According to a leading financial daily, the government of India has approved the sale of 10.82% of its stake in Steel Authority of India (SAIL). The proposal, mooted by the department of disinvestment, was deferred in the last week's meeting of cabinet committee on economic affairs (CCEA).The share sale process, proposed to be conducted through auction route or offer for sale, is expected to fetch over Rs 40 bn to the government. The disinvestment department will decide on the timing of the issue depending upon market conditions. Due to the poor market conditions, the government has not been able to launch the disinvestment programme for the current fiscal so far, although it aims to raise Rs 300 bn by selling stakes in the public sector firms.
Engineering stocks are trading mixed with Crompton Greaves and KSB Pumps leading the list of gainers while Bharat Heavy Electricals Limited (BHEL) and Everest Kanto Cylinder were the top losers. As per a leading financial daily, the Union Cabinet has imposed a 21% duty on imports of power equipment. The duty will have three components: 12% countervailing duty, 5% import duty and 4% special additional duty. Presently, the import duty for projects of less than 1,000 megawatt capacity is 5% customs duty and those more than the mentioned capacity enjoy exemption. The new development spells good news for state-owned companies BHEL and Larsen & Toubro (L&T) who are competing with their Chinese peers who manufacture cheap boilers-turbines-generators. However, power generation companies fear hike in cost of power generation resulting out of this move.