The BSE-Sensex is trading up by 4 points and the NSE-Nifty is trading down by 4 points. The BSE Mid Cap index is trading higher 0.3% and the BSE Small Cap index is trading higher 0.2% today. The rupee is trading at 60.67 to the US dollar.
Steel stocks are trading on a mixed note. While Maharashtra Seamless and Tata Sponge Iron are trading higher, Bhushan Steel and SAIL are trading lower. As per a leading business daily, SAIL & Tata Steel joint venture is scouting to purchase an overseas coal block. SAIL has acquired a large coal block in Mozambique recently and is now bidding along with its Tata Steel for another fresh overseas acquisition. This is to ensure continuous supply of coking coal, a key raw material in the production of steel. S&T Mining, formed in 2008, is a joint venture between both the companies and has invited application for coking coal assets with minimum reserve of 100 m tonnes. The joint-venture company has expressed its interest to acquire prospective assets preferably in the Australian region. Given that the international coal prices have hit the bottom it seems the joint-venturecompany is acquiring the assets at right time. The stocks of both companies are trading lower by over 1.5% today.
Most of the mining stocks are trading in the red led by Ashapura Minechem and Sesa Sterlite. Gujarat NRE Coke and MMTC Ltd are among the few stocks trading in the green. As per a leading financial daily, the government has hiked the royalty rates on 33 minerals in line with its earlier Budget announcement. This revision excludes coal, lignite and sand for stowing. The last revision in rates was effected in 2009. As per the revision, iron ore and bauxite would now attract a royalty rate of 15% from 10% earlier. Similarly, the royalty rate on manganese ore would increase from 4.2% to 5% of the notified sales price. The hike in royalty rates is expected to push up the cost for mining companies which eventually will result in higher input prices for mineral-based sectors such as steel and cement.