9:55 am Coal auction: The sixth day of the coal block auction saw Jindal Steel and Power pulling off a coup by retaining two Gare Palma coal mines at Rs 108 per tonne and this is the lowest for the power sector coal block.
There were high expectations of a fierce bidding, but it closed quickly as compared to other coal blocks. The other coal block, which was up for auction was Bicharpur in Madhya Pradesh, which went to UltraTech Cement at Rs 3,003 per tonne.
The unregulated sector is clearly seeing a high bid for these coal blocks. The block to be auctioned today is the Gare Palma IV/4 meant for the steel, cement and iron sector. It has reserves of 12.30 million tonne and some of the qualified bidders are ACC Cement, BALCO, Hindalco, Jayaswal Neco, Sesa Sterlite, SKS Ispat amongst others.
9:40 am Market check: The benchmark indices slide further, dragged by index heavyweights. The Sensex is down 258.37 points or 0.8 percent at 29203.90 and the Nifty is down 69.50 points or 0.8 percent at 8825.80. About 796 shares have advanced, 848 shares declined, and 154 shares are unchanged.
ICICI Bank, Reliance, HDFC, Coal India and Tata power are major laggards.
9:30 am Market outlook: In the nine months to the Budget, the government has announced various schemes and that is where the economic growth will come from, is the word coming in from Deven Choksey of KR Choksey Securities. Companies such as Larsen and Toubro and BHEL that are executing these projects will gain the most, he says.
According to him, investors should also look at infrastructure asset class, especially the port business because RoC is much higher there. However, he advises investors to be selective while adding companies to their portfolios.
On the ongoing coal blocks auction, Choksey believes the aggressive nature of the bidding suggests that the companies will want to get back what they have invested as soon as possible, which in turn means production will increase.
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The market has opened lower on last day of the week. The Sensex lost 114.78 points to 29347.49 and the Nifty fell 26.10 points to 8869.20. About 574 shares have advanced, 302 shares declined, and 127 shares are unchanged on the BSE.
Reliance Industries, ICICI Bank and Coal India declined 1.5-2 percent. HDFC, SBI, TCS, ITC, Axis Bank and HUL were down 0.3-0.8 percent while Tata Motors, Cipla, Hindalco, Maruti, M&M, Hero Motocorp and BHEL gained 0.3-1 percent.
Sugar stocks rallied 6-10 percent after cabinet cleared subsidy for raw sugar exports and fixed subsidy at Rs 4000/tonne for sugar season FY15.
The competition watchdog waved the green flag to Ajay Singh’s plans to acquire majority stake in SpiceJet. Speaking exclusively to CNBC-TV18 Singh says first tranche of Rs 400 crore will come in next week and the second tranche by the end of March.
The Indian rupee gained in the early trade. It has opened higher by 13 paise at 62.21 per dollar versus 62.34 Wednesday.
Pramit Brahmbhatt of Veracity said, “Reduction in FII inflows coupled with weakness in local equities may pressurize rupee to depreciate. However, gains in Asian equities and some exporter selling may limit losses. We see the range for the rupee between 61.90-62.80/dollar.”
Global markets were mixed over Germany’s rejection of Greece’s request for an extension to its loan agreement with its creditors weighing in on sentiment. The Greek government has said the Euro-group has only two options when it meets today, to either accept or reject offer made.
US stocks closed narrowly mixed after the S&P 500 touched a new intraday record, amid lower oil prices and Germany’s rejection of the Greece loan extension plan.
Meanwhile in Europe, markets managed to hold on to their modest gains despite news on the Greece loan extension. The FTSE ended in the red while CAC and DAX ended in the green.
Nikkei was sitting at fresh 15-year high yet again boosted by a weaker currency as the yen is moving towards the 119 mark.
Trading volumes in Asia will be thin for the second day due to market closures in China, Hong Kong, South Korea, Singapore, Taiwan and Malaysia.
In other asset classes, the dollar recovered on Thursday from the previous session’s losses. Precious metal traded flat on the dollar rebound and latest standoff over Greece’s bailout. Brent crude was trading at USD 60 barrels over news that US oil stockpiles increased by 7.7 million barrels last week.