Trades End Negative, Jindal Steel Loses 5%

After a flat opening to the markets today, the Indian benchmark indices closed in the negative, widening the morning's losses. The negative opening in the European markets dragged the markets further down.

The political situation has not shown any sign of improvement. The Prime Minister has issued a statement in the Parliament that the loss predicted by CAG is not representative of the fact. The Coal Minister too has said that the coal allocation has not led to any loss to the nation.

Amid this political chaos, the Supreme Court has asked the government to complete a mobile phone airwaves auction by Jan 11, 2013, and has also allowed those carriers whose licenses are set to be cancelled to operate until Jan 18, 2013.

Among the global indices, trades in the Asian indices remained mainly negative today. The Japanese Nikkei managed to close in gains after seeing range-bound trades. Hang Seng and Shanghai, however, closed in negatives. Shanghai was down 1.77% as the country is deeply in an economic slowdown.

The European indices, which opened in the negatives in the morning, have now come out of woods and are trading flat to positive. The markets in London are closed due to a bank holiday.

On the sectoral indices front, Realty lost over 2% and was the top loser for the day. The Bankex, CG, Metals and Power indices also lost over 1% each by closing. Oil & Gas and FMCG were the only ones that managed to remain in the green.

Among the Sensex stocks, the country’s biggest lender, SBI, lost over 2% after the RBI said that banks must act within the regulatory frame. Earlier in the last week, the SBI Chairman had said that the concept of CRR should be scrapped. Bharti Airtel, which was the top gainer by mid-day, cut its gains significantly and closed with marginal 0.44% gains. M&M managed to remain over 1% up through the day. RIL and Sun Pharma also remained in gains.

Jindal Steel maintained its negative streak and emerged as the strongest loser. The stock lost 5% today. The scrip is under pressure as it has terminated the contract to develop the El Mutun iron ore mines in Bolivia. BHEL has also lost 2.7% after a few investment banks have downgraded the stock with the target price below Rs 200.

L&T lost over 1% as its bank guarantee has been liquidated by Visa power. The company is also set to divest its plastics business division.

Among the other shares, Adani Enterprises lost about 9% as the Home Ministry has barred Adani Ports and Special Economic Zone from participating in two major port projects on security concerns. Other Adani Stocks (Port and Power) also closed in losses. A few other stocks like JP Power, Lanco Infra, Wockhardt, Suzlon Energy, GMR Infra and IFCI also closed with losses of over 5% each.

Mangalore Refinery, on the other hand, was the top gainer in the ‘A’ group scrips and held its position all day today. Neyveli Lignite Corporation gained 2.3% by closing.

The advance-decline ratio on the BSE remained in favour of the bears.

This is the August series expiry week, and we remain the market to remain volatile.