The Indian equity markets nosedived and have ended on a weak note. Most of the decline was attributable to the fall in the Indian Rupee that plunged to a new lifetime low during the day. Stocks across the board ended on a weak note with those from the banking, capital goods, power and PSU space facing the maximum selling pressures. The BSE-Sensex closed down by about 590 points while the NSE-Nifty closed down by 189 points. The BSE Mid Cap and the BSE Small Cap indices closed on a weak note as well and were down by 2.1% and 1.7% respectively.
As regards global markets, most of the Asian indices also closed on a weak note. European indices have opened on a poor note as well. The rupee was trading at Rs 65.73 to the dollar at the time of writing.
All Energy stocks have ended the day in red with Bharat Petroleum Corporation Ltd (BPCL), Essar Oil, and Hindustan Petroleum Corporation Ltd (HPCL) facing maximum selling pressures. The consortium of Oil and Natural Gas Corporation (ONGC) and Oil India have signed an agreement with oil explorer Anadarko Petroleum Corp to acquire its 10% stake in the Rovuma Area 1 Offshore Block in Mozambique. This is considered to be one of the best acquisitions made by the consortium in recent times. The block is expected to have natural gas reserves of 50 trillion cubic feet which stands 8 times bigger than the asset of Reliance Industries in the Krishna-Godavari basin. However, the expected capital expenditure in the next 5-7 years could prove a major drag for ONGC. As per a leading daily, this could result in a net debt situation for ONGC as the company might have to shell out Rs 250 bn over the next 5-7 years towards capital expenditure. As at the end of March 2013, on a standalone basis, ONGC had cash reserves of Rs 132 bn and zero debt.
Except for Gujarat Industrial Power, CESC Ltd and Satluj Jal Vidyut, all thepower sector stocks have closed in red today with Jaiprakash Power and Reliance Infra facing the maximum selling pressures. The Prime Minister today has given a green signal to 36 infrastructure projects worth Rs 2 lakh crores across sectors such as power, ports, roads, cement and petroleum. With this 28 power projects have received a significant push from the higher level. These projects have been facing hurdles such as coal linkages, environment issues and forest clearances. Most of the power sector companies such as Power Grid, Tata Power, Adani Power, Reliance Infra and others are expected to benefit considerably.