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Sensex closes in the red
Thu, 25 Sep Closing

After starting the day on a flat note, Indian stocks lost momentum as selling activity intensified till the end. The BSE-Sensex ended the day lower by about 276 points or 1.0%, while the NSE-Nifty ended lower by about 1.1% or 91 points. Stocks from the healthcare and software spaces ended in the green today, while those from the energy and metal sectors were amongst the top underperformers. Mid and smallcap stocks were also out of favour today with the BSE Mid Cap and BSE Small Cap indices ending the day lower by about 2.4% and 3.2% respectively.

Stock markets in other parts of Asia ended the day on a mixed note today with Japan and China closing higher by about 1.3% and 0.1% respectively, while markets in Hong Kong were down 0.6%. European stocks were trading firm at the time of writing. The rupee was trading at Rs 61.02 to the dollar at the time of writing.

Auto stocks ended the day on a weak note with Force Motors Ltd and Escorts Ltd leading the pack of losers. As per a leading financial daily, the Competion Commission of India's order requiring car makers to supply parts more widely is likely to encourage the production and sale of non-certified generic components in the Indian auto market. So far, tighter control over supply and price of spares had allowed car makers to protect hefty margins on parts and repairs, while raising the cost of car ownership for consumers. The decision has not gone down well with auto majors. The latter believe that increase and spread of cheap copycat components will undermine the safety and reputation of their brands.

Stocks from the oil and gas space ended the day on a weak note with Reliance Industries Ltd and Chennai Petroleum Corporation Ltd leading the losses. In a major setback to the energy sector, the Cabinet Committee on Economic Affairs (CCEA) has deferred its decision on revising gas prices. A decision is now delayed until November. While the oil ministry favors remunerative gas price that will boost investments in exploration and production, the Power Ministry does not want the rates to be hiked by more than 25% over the current price to avoid the huge rise in electricity tariffs. The rise in gas prices will further impact the prices of auto gas and cooking gas. And with State elections coming up, the Government does not want to take risks. This is a negative development for firms like ONGC. The stock has closed in the red today, down 3.4%.

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