Indian stock markets languished in the red on account of persistent selling activity during the previous two trading hours. Selling pressure is witnessed among the heavyweights stocks, while mid and small cap stocks are trading on a firm note. Software and energy sector stocks are leading the pack of losers, whereas stocks from automobiles sector are trading higher.
The BSE-Sensex is trading down by 117 points and the NSE-Nifty is trading down by 38 points. However, the BSE Mid Cap index is trading up by 0.2% and the BSE Small Cap index is trading up 0.05% today. The rupee is trading at 60.26 to the US dollar.
Power stocks are trading on a mixed note. While Indiabulls Power and Gujarat Industries Power are trading firm, Torrent Power is trading on a weak note. As per a leading business daily, Tata Power is expected to sell its balance holding of 25% in the Indonesian coal mines. The company's stake in the mines is valued at US$ 1 bn. Tata Power bought 30% stake in two Indonesian thermal coal producing companies along with related power infrastructure companies in 2007. While it sold 5% stake in the coal companies together with infrastructure companies, it still was left with 25% stake. The company is expected to offload this balance stake due to drop in international coal prices.
Tata Power bought stake in the Indonesian mines as it won a bid for imported-coal based 4,000 MW Mundra Ultra Mega Power Project. Coal was sourced for a specified price. But, since the international coal price sky rocketed to US$ 100 per tonne, Indonesian government banned coal exports below specified price. Due to this coal imports became unviable for the company. The stock of Tata Power is trading higher by 0.7% on NSE today.
PSU banking stocks are trading mixed with Indian Overseas Bank and Indian Bank being the major gainers whereas Andhra Bank and United Bank of India are among the major losers. As per a leading financial daily, State Bank of India (SBI) wants to increase the share of sales from international business from 18% at present to 25% over the next three years. This is expected to give the bank greater risk diversification. For international operations, SBI wants to localize as much as possible. The bank is participating in syndications for local business and signing master risk participation agreements. The number of foreign offices of SBI increased from 186 in FY13 to 190 in FY14 across 36 countries. In FY14, the bank entered two new countries Botswana (Africa) and South Korea. Along with growing the share of the total asset base, the bank also wants to improve International Business Group's contribution to profits. For the quarter ended June 2014, SBI posted a 15% YoY increase in net interest income but net profit margin was down by 1% to 9.2% due to higher provisioning and lower non-interest income. SBI stock is trading marginally up.