Cement stocks plunge as CCI ruling on alleged cartelisation expected soon
Rumours of penalties of cement companies by CCI has been doing the rounds
Stocks of cement manufacturers fell on rumors that Competition Commission of India's (CCI) ruling on alleged cartelisation by companies is expected shortly, with a negative verdict likely to hurt profits and pricing power of manufacturers, dealers said.
"Rumours of penalties of cement companies by CCI has been doing the rounds time and again," said Vivek Mahajan, head of research at Aditya Birla Money.
Brokerage Macquarie, in an March-end report, said it expects penalties of about 7 percent of total revenue (last three years' average), which equals 5-6 percent of market capitalisation for each year of investigation.
India Cements fell 3.39 percent, ACC fell 2.15 percent and Ambuja Cements lost 2.55 percent.
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While the BSE Sensex was up 7.09 points or 0.01 percent at 49,751.41, the Nifty was up 32.10 points or 0.22 percent at 14,707.80
ONGC was the top gainer in the Sensex pack, rallying 4.66 percent, followed by NTPC, Reliance Industries, IndusInd Bank, Axis Bank and PowerGrid
The 30-share BSE Sensex ended 434.93 points or 0.85 percent lower at 50,889.76, pressured by robust selling in banking and auto counters