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Indian share markets open weak
Tue, 28 Aug 09:30 am

Most of the Asian stock markets have opened the day in red with markets in Japan (down 0.6%), Hong Kong (down 0.2%) and Taiwan (down 1.1%) leading the losses in the region. However, the stock markets in China (up 0.1%) have opened in green.

The Indian share market indices have opened the day on a weak note. Most of the sectoral indices are witnessing losses led by stocks in the capital goods and realty sector. However, software and FMCG sector have opened in green.

The Sensex today is down by around 11 points (0.1%), while the NSE-Nifty is down by around 5 points (0.1%). Mid and small cap stocks have opened in the red as well with the BSE Mid Cap and BSE Small Cap indices down by around 0.6% and 0.3% respectively. The rupee is trading at Rs 55.85 to the US dollar.

Oil and gas stocks have opened mixed with Gujarat State Petronet Ltd (GSPL) and Hindustan Petroleum Corporation Ltd (HPCL) leading the gains while Reliance Industries Ltd (RIL) and Mangalore Refineries and Petrochemicals Ltd (MRPL) are witnessing losses. As per a leading financial daily, Iran is putting pressure on Oil and Natural Gas Corporation Ltd.'s (ONGC) subsidiary ONGC Videsh Ltd (OVL) to sign a formal contract and proceed with developing the Farzad B field it had discovered in Iran or surrender it in lieu of an unexplored block. The development of the field would entail an investment of US$5-US$6 bn. The issue is likely to make OVL vulnerable to US sanctions which will kick in if a foreign entity invests more than US$20 m within a 12-month period in Iran's hydrocarbon sector. The sanctions if applied will block technology and funding routes for OVL. But the company also does not want to give up Farzad with proven reserves of 12.5 trillion cubic feet of gas.

The stocks in the Power sector have opened mainly in red led by Jai Prakash Power and Adani Power. As per a leading financial daily, the Attorney General of India Mr. Vahanvati has said that the power regulator can regulate and revise electricity tariffs irrespective of the contracts signed by power producers with distribution companies. The statement offers hope for power generators like Tata Power, Reliance Power and Adani Power that together own 12,000 Megawatt (MW) capacity of import coal based plants. These companies have been seeking increase in tariffs to compensate for sharp increase in coal prices on account of regulatory changes in countries like Indonesia and Australia and because of depreciation of rupee against the dollar. However, they are stuck with their long term power contracts with the State regulators and distribution companies that have refused to pay more. Earlier, the power ministry had refused to intervene but referred the matter to the Central Electricity Regulatory Commission (CERC). Mr. Vahanvati has said companies cannot be denied a hearing even if they have signed legally-binding contracts.

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Feb 23, 2018 (Close)