The Indian stock market continued to trade weak on account of selling pressure in heavyweights during the last two hours of trade. Except for power, all sectoral indices are in the red. Stocks from the software, metal, auto and banking sectors are leading the pack of losers.
The BSE-Sensex is trading down by 132 points while NSE-Nifty is trading 46 points below yesterday's closing. The BSE Mid Cap
and BSE Small Cap indices are trading down by 0.4% and 0.3% respectively. The rupee is trading at 49.49 to the US dollar.
Steel stocks have been trading mixed with JSW Steel, Gujarat Mineral Development Corporation (GMDC) and Maharashtra Seamless leading the pack of gainers. However, Adhunik Metaliks, Steel Authority of India Ltd (SAIL) and Tata Steel are trading weak. As per a leading financial daily, SAIL and Korea's Posco have largely settled their differences related to pricing of a key raw material and on the quantum of equity stakes regarding the proposed 3 million tonne plant, the two companies plan to build at Bokaro. Posco that intends to bring the patented non-coking coal steelmaking technology FINEX to the joint venture has agreed to SAIL's offer of iron ore fines at a 10% discount. Earlier, it was demanding a discount of 20% with respect to the market prices. SAIL too has agreed to Posco's insistence on a majority equity stake as the latter was not inclined to lend its critical technology to a JV with less than 51% stake. The agreement has been reached ahead of a visit to Seoul by Union steel minister.
However, the details of the proposed agreement are not expected to be ready before the minister's trip since any strategic alliance will have to be cleared by SAIL's board of committee. The two companies are still trying to sort out differences on whether SAIL could retain a first right of refusal for any future agreements with Posco.
Engineering stocks have been trading mixed as well with TRF Ltd, BGR Energy and Bharat Heavy Electricals Ltd (BHEL) leading the pack of gainers. However, Welspun Corp, Elgi Equipments and Cummins India are trading weak. As per a leading financial daily, L&T (Oman), a subsidiary of Larsen & Toubro (L&T) has bagged twin orders worth Rs 8.8 bn from the Muscat Municipality and from the Ministry of Transport and Communication, Sultanate of Oman. The orders are for construction of roads. Wadikabir-Darsait road project involves design and construction of flyovers and is scheduled to be completed in 2 years. Mahlah-Ghubbrat Al Tam-Ismaiyah project involves 45 km road works, four bridges and cross-drainage work and is expected to be completed in 41 months. This is considered a major breakthrough for the company in the urban infrastructure segment internationally. However, the stock of the company is trading weak.