Indian share markets widen losses

Mon, 8 Oct 01:30 pm

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After a weak opening, Indian share markets continued to slip deeper into the red in the post-noon trading session. Barring pharma and FMCG, all the sectoral indices are trading in the negative with realty, oil & gas and capital goods stocks leading the pack of losers.

BSE-Sensex is down 151 points and NSE-Nifty is trading down 52 points. While BSE Mid Cap index is down by 0.1%, BSE Small Cap index is marginally up. The rupee is trading at 52.2 to the US dollar.

Majority of the power stocks are trading in the red with Tata Power and Reliance Infra leading the pack of losers. As per a leading financial daily, Tata Power's distribution arm Tata Power Delhi Distribution Ltd (TPDDL) is bidding for three power distribution companies in Nigeria. Out of the total of 54 companies that had bid for them, 21 firms including TPDDL have cleared the technical evaluation process. For this purpose, TPDDL has formed two separate consortiums with two African companies. The total investment required in setting up the three distribution companies has been estimated at US$ 900 m. Tata Power is expected to fund its share in the consortiums through the equity route. The Nigerian government has commenced privatization of the power sector in 2010.

Finance Minister, P. Chidambaram believes that the slowdown in the Indian economy is not really a cause for undue worry. At a recent conference, the FM mentioned that market sentiments have been affected by the challenging times in the global economy. India's economy has fared better than the global economy, which saw a drop from 5.3% in 2010 to 3.5% during the next two years. India performed better, growing by 6.5% during FY12. However, during the first quarter of the current year, the growth rate slowed down to 5.5%. The advanced economies grew in the range of 1.4% to 3.2% over the past three years. The FM also added that while the tight monetary policy of the Reserve Bank of India (RBI) is aimed at taming inflation, it has also dampened growth. He is of the view that the foremost task is to augment savings and then channelize such savings into investments. Having said that, the government on its part also needs to focus on cutting down deficit and removing supply side bottlenecks if inflation has to remain within acceptable levels going forward.