Indian stocks decline, oil and gas sector surges on price hike
By Nagendra Padala | June 26, 2010 1:33 AM EST
Indian stock markets ended lower on Friday tracking global markets, which fell on expectations of tighter financial regulation ahead of the weekend G20 meeting and uncertainty about the world economic recovery.
The empowered group of ministers (EGOM) approved on Thursday to deregulate petrol and diesel prices, which means the prices of petrol and diesel will be linked to the market price of crude.
The historical decision taken by the EGoM meet today was not looked upon favorably by the market which turned more turbulent, following its announcement.
‘The under recoveries on the part of oil marketing companies for petrol would have been 70 billion rupees and for diesel 230 billion rupees for the whole year if their prices would not have been decontrolled,” said S Sundareshan, oil secretary.
The benchmark BSE Sensex declined 0.89 percent or 155.71 points to 17,574.53 and the 50-share NSE Nifty declined 1.01 percent or 53.90 points to 5,266.70 and ended below its strong support level 5,290 mark.
Among the sectoral indices, oil and gas, public sector undertakings and healthcare sectors ended with gains, while all other sectors experienced selling pressure. The gains from oil and gas sector were offset by declines in heavy weight metal and banking sectors.
Sterlite Industries, ICIC Bank and Mahindra and Mahindra were among the top Sensex losers.
Banking sector declined 2.19 percent to 10,752.74 on fears of likely rate hike. ICICI Bank declined 3.09 percent to 857.50 rupees, HDFC Bank declined 2.69 percent to 1,947.80 rupees and SBI fell 2.36 percent to 2,300 rupees.
Sterlite Industries declined 3.25 percent to 168.25 rupees as metal prices declined in international market on fears over global economic recovery. Jindal Steel and Tata Steel fell 2.41 percent and 1.61 percent, respectively.
Anil Ambani owned Reliance stocks gained, led by the news that Reliance Industries and Reliance Natural Resources Ltd (RNRL) have signed a revised gas supply master arrangement.
RNRL gained 3.29 percent to 65.95 rupees, Reliance Capital and Reliance Communications gained 1.32 percent and 3.35 percent, respectively.
ONGC, Reliance Communications and Cipla were among the top Sensex gainers.
Oil and gas sector outperformed the market by gaining 2.63 percent to 10,604.07 as the government decided to deregulate the petrol and diesel prices.
ONGC gained 6.35 percent to 1,264 rupees, HPCL surged 13.66 percent to 401.05 rupees and BPCL advanced 12.84 percent to 621.35 rupees.
The overall market breadth was negative with 1,148 advances against 1,696 declines on BSE.
Fortis Healthcare fell 1.82 percent to 153.55 rupees, after the company said in a statement said that Singapore's GIC has decided to defer preferential investment in the company, but will evaluate participation in broader fund raising by Fortis.
GMR Infrastructure gained 0.53 percent to 57.15 rupees, led by the news that a consortium of the company with Malaysia Airports Holdings won a bid to build, operate, modernise and expand Male International airport in Maldives.
The BSE’s Midcap Index declined 0.70 percent to 7,082.51 and Smallcap Index fell 0.54 percent to 8,989.20. Bank Nifty Index declined 2.30 percent and CNX IT fell 1.54 percent.
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