Indian stock market indices made further inroads into the negative territory during the previous two hours of trade as selling activity intensified across index heavyweights. All sectoral indices are trading weak, led by Oil and Gas and Banking stocks.
The BSE-Sensex is trading down by 446 points and NSE-Nifty is trading weak by 135 points. BSE Mid Cap and BSE Small Cap indices are trading lower by 2.0% and 1.9% respectively. The rupee is trading at 52.14 to the US dollar.
Steel stocks are trading weak led by Jindal SAW Ltd. and JSW Ispat Ltd. As per a leading financial daily, Steel Authority of India Ltd. (SAIL) has slashed India's steel demand forecast to half of the earlier estimate. The domestic steel demand is now estimated to grow by 6% in FY12. The forecast has been cut down as demand from the automobile and construction sector has been adversely impacted by high interest rates. The monthly car sales for the month of October registered the biggest percentage fall (23.8%). As per the management, the sluggish demand may impact the steel prices adversely. Besides slowing demand, the company is struggling with a strong dollar. It aims to expand its crude steel production capacity to 40 million tonnes by 2020, up 212% with respect to the existing capacity. The stock was trading in the red.
Stocks from the energy sector have also been trading in the red led by Indian Oil Corporation (IOC) and Essar Oil. As per a leading financial daily, Oil & Natural Gas Corporation (ONGC) is likely to give its 'no-objection certificate' (NOC) to Cairn Energy Plc's stake sale in its Indian unit to Vedanta Resources by the year-end. The NOC will be given once Cairn Energy, Cairn India and the mining group sign a legally binding contract. As per the contract, Cairn will be paying Rs 2,500 per tonne cess on its share of production from the all-important Rajasthan oilfields and will also make royalty payments cost-recoverable. The ONGC management has said that the agreement is in the final leg and the NOC is expected to be given before end of December. The stock was trading in the red.