Markets slip after coal block allocations are termed illegal

Sensex is up 24 points at 26,445 and Nifty is down 5 points at 7,909

Markets came off their record highs after metal shares declined as the Supreme Court said coal blocks alloted via screening panel since 1993 are illegal. 

 

The Supreme Court today said that guidelines were breached in coal block allocations during the UPA regime and said the terms of allotment were illegal.

 

At 3.10 PM, the 30-share Sensex is up 24 points at 26,445 after hitting a record high of 26,631 and the 50-share Nifty is down 5 points at 7,909 after touching a record high of 7,966.

 

BSE Metal index has slumped by nearly 4% followed by counters like Realty, Power and Banks, all declining by 1% each. However, BSE IT, Auto and FMCG indices have gained by nearly 1% each. 

 

Shares of metal companies are under tremendous pressure after the Supreme Court today said that guidelines were breached in coal block allocations during the UPA regime and said the terms of allotment were illegal.

 

The court also disallowed exploitation of captive coal mines by Ultra Mega Power Projects (UMPPs).

 

Jindal Steel and Power Limited (JSPL), Hindalco Industries, JSW Steel, Sesa Sterlite and Tata Steel are down 4-12% on the Bombay Stock Exchange (BSE).

 

Other notable losers are Tata Power, ICICI Bank, GAIL, Axis Bank and HDFC Bank. 

 

On the gaining side, TCS, BHEl, Dr Reddy’s Labs, Maruti Suzuki and ITC have gained between 2-3%. 

 

The broader markets are under performing the benchmark indices- BSE Midcap and Smallcap indices have slipped between 0.2-0.4%. 

 

The market breadth in BSE turns weak with 1,625 shares declining and 1,316 shares advancing.

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(updated 3 PM)
Markets came off their record highs after metal shares declined as the Supreme Court said coal blocks alloted via screening panel since 1993 are illegal. 

 

The Supreme Court today said that guidelines were breached in coal block allocations during the UPA regime and said the terms of allotment were illegal.

 

At 3 PM, the 30-share Sensex is up 41 points at 26,460 after hitting a record high of 26,631 and the 50-share Nifty is down 2 points at 7,910 after touching a record high of 7,966.

 

Among broader markets, BSE Midcap and Smallcap indices have gained between 0.3-1%. 

 

As the country grapples with sub-par monsoon and its impact on the overall economic growth, Nomura in its recent report has revised upwards its FY15 and FY16 GDP (gross domestic product) target and believes that growth indicators are perking up.

 

In a recent report, they suggest that though below-normal monsoon will drag down agriculture growth, industrial growth has, however, turned a corner in second quarter of the calendar year 2014 (April-June period), ahead of the elections, and at a much faster pace relative to the Nomura’s expectations.

 

The Indian rupee is trading marginally higher at Rs 60.44 to the US dollar compared to the previous close of Rs 60.46. Domestic stocks trading at record highs helped improve sentiment even as the US dollar gained against the euro and the Japanese yen.

 

Global Market:
 

Asian markets were trading firm with Japanese shares gaining the most led by exporter shares after the yen weakened against the US dollar. The benchmark Nikkei ended 0.5% higher at 15,613. Straits Times and Hang Seng were up nearly 0.5% each while Straits Times gained 0.4%.

 

Furthermore, European markets are trading firm with DAX and CAC up 1% each, while FTSE is trading flat with a negative bias.

 

Sectors & Stocks:
 

On the sectoral front, BSE IT index has spurted over 1% followed by counters like Auto, Banks, Capital goods, FMCG, Healthcare and Oil & Gas, all gaining by nearly 1% each. However, BSE Metal index has declined by almost 2%.

 

The main gainers on the Sensex are BHEL, TCS, Dr Reddy’s, Maruti Suzuki, HDFC, SBI and HUL, all surging between 1-3%.

 

Among individual names, Maruti Suzuki has gained neraly 2% after Credit Suisse raised the target price to Rs 3,500 per share. The brokerage believes the launch of small diesel engines will be more important than new car launches and expects the company to grow faster with a 5 percent market share gain in next 3 years.

 

Tobacco-to-FMCG conglomerate ITC has replaced Tata group's IT giant TCS as the country's most admired company on a Fortune magazine list and is up over 1%.

 

On the losing side, Hindalco, Sesa Sterlite, Tata Power, Tata Steel and GAIL have slumped between 1-6%.

 

Among other shares, PI Industries has soared 16% to Rs 508, also its record high on the National Stock Exchange (NSE), on the back of heavy volumes.

 

The market breadth in BSE remains marginally positive with 1,530 shares advancing and 1,371 shares declining.