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Indian share markets tumble
Fri, 23 Nov 01:30 pm

Selling in index heavyweights resulted in the Indian share markets dropping sharply in the post noon trading session. Majority of the sectoral indices are trading negative with realty, banking and FMCG stocks being the biggest losers. Consumer durables and power stocks are the only stocks trading positive.

BSE-Sensex is down 76 points and NSE-Nifty is trading down by 26 points. While BSE Mid Cap index is down 0.1%, the BSE Small Cap index is trading up marginally. The rupee is trading at 55.3 to the US dollar.

Majority of the energy stocks are trading negative with Gas Authority Of India Ltd. (GAIL) and Mangalore Refinery and Petrochemicals (MRPL) being the biggest losers. Essar Oil and Oil India are among the few gainers. According to a leading financial daily, the Cabinet Committee on Economic Affairs (CCEA) has made 5% ethanol blending with petrol mandatory for oil marketing companies (OMCs) namely Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOCL). Two years since its partial implementation, this marks an official directive from the government for the compulsory sale of ethanol blended petrol by OMCs and is likely to reduce the country's fuel imports. CCEA has asked the petroleum ministry to ensure that the ethanol blended petrol (EBP) programme is compulsorily followed by OMCs. The EBP programme is in effect in 13 states out of the 19 states mandated. However, the EBP programme is partially implemented in these 13 states as the Department of Chemicals, which is the largest ethanol consumer, was opposing the programme citing diversion leading to shortage of the biofuel for its own industrial consumption. The CCEA has also allowed ethanol imports in case of shortage in the domestic markets. The committee has also approved market-based pricing for ethanol thereby de-regulating the ethanol industry which mostly comprises of sugar companies. The petroleum ministry is likely to come out with a gazette notification and float tenders for procurement of ethanol. The Indian Sugar Mills Association (ISMA) has welcomed the move saying that the measure is expected to boost the ethanol industry. Most of the sugar stocks are trading in green with Rajshree Sugar and Dhampur Sugar leading the gains.

Most of the steel stocks are trading negative with Tata Steel and JSW Steel, being the biggest losers. A leading business daily recently reported that steel major, Steel Authority of India (SAIL) is seeing its inventory levels go down on the back of pickup in demand. This development is being witnessed since the start of this month. As per the company's chairman, demand for HR and long products has seen an uptake. At the end of September 2012, inventory levels at steel companies were nearly two to three times of what they were at the end of FY12. SAIL was believed to have an inventory of about 0.4 m tonnes at the end of March 2012, which increased to about 1 m around the festive season. As per the management, a key reason for rising inventory levels was the increasing imports. This is in addition to the fact that capacities have increased and there is a slowdown in demand. It is reported that imports have increased by 33.7% YoY during 1HFY13.

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Feb 20, 2018 03:35 PM