Asian stock markets have opened the day on a firm note. Stock markets in South Korea (up 1.6%), Japan (up 1.0%), Indonesia (up 0.9%), China (up 0.5%) and Hong Kong (up 0.5%) are leading the gains. However, the Indian stock market have opened the day on a weak note. Stocks in the IT and Oil & Gas space are leading the losses.
The BSE-Sensex is trading lower by 94 points (0.6%), while the NSE-Nifty is down by around 27 points (0.6%). BSE Mid cap and BSE Small cap stocks are trading in the red, with the BSE Mid Cap and BSE Small Cap indices down by 0.1% and 0.2% respectively. The rupee is trading at 51.96 to the US dollar.
Oil & gas stocks have opened the day on a weak note with Reliance Industries (RIL) and Oil & Natural Gas Corporation (ONGC) trading in the red. RIL has sent an arbitration notice to the Petroleum & Gas Ministry. This is after the ministry announced its intention to restrict the amount of cost recovery on the expenditure incurred by RIL in the east coast fields. This comes at a time when RIL is being criticised severely for the falling gas output from the Krishna Godavari basin. A couple of days back, Mr G C Chaturvedi, the Petroleum Secretary, said that the ministry will decide the action to be taken against RIL for its falling gas output. The ministry has been in consultation with the law ministry regarding the same.
Aluminium stocks have opened the day on a weak note with National Aluminium Company (NALCO) and Hindalco Industries trading in the red. State-owned aluminium producer NALCO has hit several roadblocks in recent times. For one, the company is facing a shortage of 2.77 lakh tonnes of coal from Mahanadi Coalfields of Coal India Ltd (CIL). This has forced NALCO to buy coal from other expensive sources which in turn have put pressure on margins. Secondly, the company has been hit by strike by contract workers since November 16, 2011. The workers are demanding higher wages. Moreover, Utkal E block with 67.4 million tonnes reserves alloted by the Coal Ministry in 2004 could not be developed so far for want of land acquisition by state government. To further add to the firm's problems, investment of about Rs 65 bn for the third phase expansion has been put on hold on account of difficulties in acquiring mining lease for Pottangi bauxite deposit in Odisha with reserves of 75 million tonnes.