Indian equity markets could not hold on to early morning gains and fell into the red during the last two hours of trade. Sectoral indices traded mixed with FMCG and healthcare stocks registering gains while Auto and metal stocks traded weak.
The BSE-Sensex is trading lower by 17 points and NSE-Nifty is trading lower by 10 points. BSE Mid Cap is trading lower by 0.1% and BSE Small Cap is currently up by 0.1%. The rupee is trading at 53.60 to the US dollar.
Energy stocks are trading weak led by Cairn India and Oil and Natural Gas Corporation Ltd. (ONGC). According to a leading financial daily, a group consisting of ONGC, Oil India and IOC is planning to bid USD $5 bn for stakes in Canadian oil sands assets owned by ConocoPhillips. This would be first in Canada for Indian energy companies after years of strong public expressions of interest in the Alberta oil sands. In January, ConocoPhillips put stakes in six Alberta properties on the auction block. They produce 12,000 barrels of oil a day from an estimated 30 bn barrels of bitumen. India is the world's fourth-largest oil importer, buying nearly 80% of its needs from abroad. With demand and refining capacity rising, the government has told state firms to secure energy assets overseas to help power the expanding economy.
Stocks of real estate/ construction companies are trading weak with Patel Engineering and GMR Infrastructure leading the pack of losers. The stock of construction major IVRCL has surged significantly over the past few days. This is seemingly on the back of two key developments. The first one was the company's announcement of reducing the debt burden by improving the health of its balance sheet. Secondly, the company also announced some large order wins in the recent past, after witnessing a period of minimal order inflow. Total new orders announced were to the tune of Rs 9.6 bn including an approximate Rs 6 bn overseas irrigation project. It must be noted that IVRCL's management had recently stated that it is looking at expanding business overseas.