With selling in index heavyweights gaining ground on account of weak production numbers, Indian share markets slipped in red in the last two trading hours. Majority of the sectoral indices are trading negative with metal, capital goods and oil & gas stocks leading the pack of losers. FMCG, consumer durables and IT stocks are among the few gainers.
As per a leading financial daily, the Index of Industrial Production (IIP) slipped by 0.4% in September 2012 on a YOY basis. The dip has been on account of 1.5% fall in manufacturing which constitutes about 76% of the industrial production. The mining and electricity sectors clocked growths of 5.5% and 3.9%, respectively. Capital goods registered the steepest fall of 12.2% whereas consumer goods posted a marginal fall of 0.3%. During the period April-September 2012, the IIP has expanded by a mere 0.1%.
Most of steel stocks are trading in negative led by Tata Steel and Steel Authority of India (SAIL). Maharashtra Seamless and Tata Sponge are among the few gainers. As per a leading financial daily, SAIL has stopped production at Bolani iron ore mine due to expiry of the working permit for the mine. Reportedly, the Bolani mines spread over 1,321 ha in Joda mines circle has the best quality iron ore primarily used for Dugapur and Rourkela plant of SAIL. Around 93% of this total mining area belongs to the forest category and has an estimated iron ore reserve of about 150 m tonnes. SAIL had received permit for the maximum allowable period of two years after the grant of stage-I forest clearance in November 2010. The company will be able to restart operations at the mine after the grant of stage-II forest clearance. The company is in putting in efforts to obtain stage-II clearance which was getting delayed as the government felt that the mining activity in the area may endanger wild life. SAIL's steel production stands at 13 m tonnes currently which the company wants to raise to 23 m tonnes by FY13. In line with its Rs 700 bn capex plans, the company wants to scale up its iron ore production to 38 m tonnes.