Sensex closes at one-month low on coal scam, rail fare rollback

4:00 pm The BSE Sensex dropped more than 2 percent in its biggest one-day fall since late February today.The BSE Sensex ended at 17,196, down 405 points over the previous close.The NSE Nifty settled at 5,228, down 136 points over the previous close

Weaker-than-expected euro zone PMI was a trigger to pronounced selling in stock markets and the rupee in the afternoon, in a day already marked by concerns about a government auditor report that said the government may have sold coal deposits too cheaply. Also , the government announced a sweeping rollback of a rail fare hike, adding to concerns about the ruling coalition’s standing.

Jindal Steel was the biggest loser among largecaps, falling 8 percent. India’s most valued stock Reliance Industries crashed 4 percent to Rs 737.

3:00 pm The BSE Sensex shed more than 200 points and the Nifty slipped below 5300 as European markets extended losses on poor manufacturing PMI. GermanY’s Manufacturing PMI fell to four-month low at 48.1 in March. France’s CAC and Germany’s DAX fell over 1%, while Britain’s FTSE was down 0.8%. The Dow Jones futures shed 63 points.

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Meanwhile, the rupee has breached 51 against the dollar and is currently trading at 51.01 to the greenback. Dollar demand also came from traders looking to take advantage of the arbitrage in the non deliverable forwards market.

The undercurrent in India has also been hit hard by a newspaper report of a major scam in the coal auction.In addition, the rollback of passenger fare hike by the new Railway Minister has also soured the mood on domestic bourses.

Country’s largest lenders State Bank of India and ICICI Bank were down 1.5-2% while rival HDFC Bank went down 0.5%. Index heavyweight and oil & gas producer Reliance Industries tumbled over 3% to Rs 744.35. Capital goods majors Larsen & Toubro and BHEL fell 2-2.7%

JSP, RPower named beneficiaries in coal scam, stocks plunge

2:00 pm The Comptroller and Auditor General (CAG) has thrown up a loss figure of Rs 10,67,000 crore for “undue benefits” given to coal companies that were allocated coal blocks without an auction between 2004 and 2009.

The report not only resulted in an uproar in parliament, but also on Dalal St. The beneficiaries include, among others, Tata and Birla companies, Jindal Steel, the Anil Agarwal (Vedanta) and Anil Ambani groups, the Adanis, Arcelor Mittal and several public sector firms.

Reacting to the report, Jindal Steel and Power plunged more than 5 percent at Rs 555, while Adani Power fell around 2.5 percent while Anil Ambani’s RPower fell almost 3 percent at Rs 126.

“Steel, which is the backbone of country’s infrastructure, will be in a big mess if this report by CAG is true, Vivek Mahajan, head of research at Aditya Birla Money told Reuters**.**

Meanwhile the German Composite PMI subsequently is down to a four-month low of 51.4**. Subsequently Indian markets too are trading at the day’s low, with Nifty down 65 points at 5,300.**

Rail fare hike rolled back, Tata Motors gains on China JV

12:30 pm Railway Minister Mukul Roy has struck down passenger fare hikes in all classes except AC first class, saying that he wanted to reduce the burden of the common man. The Minister added that he intended to launch an aggressive drive to mop up resources for the railways.

Meanwhile, Tata Motors ascends 1 percent as Jaguar Land Rover inks JV with China’s Chery Automobile to produce and sell JLR- and JV-branded vehicles in China.

Welspun Corp gains 1 percent as the company has bagged order worth Rs 1,217 crore from International and domestic markets. Following these orders, the current order book of the company stands at Rs 6,241 crore (about 876KMT for pipes, and external plate orders of 92 KMT) without excluding the orders being executed in Q4 FY2012.

Meanwhile Telecom Regulatory Authority of India has proposed to regulate the duration, frequency, timing and audio levels of advertisements. It said that free-to-air channels should not carry ads exceeding 12 minutes per hour (inclusive of 10 minutes of commercials and two minutes of self promotions) and pay channels not over six minutes of ads an hour.

Rupee at 50.90, PSU stocks rally on NBCC IPO

11: 30 am Markets are trading flat though barring metal most of the sectoral indices are in green. PSU stocks are leading the pack supported by the of IPO of NBCC, a government entity after a long time.

National Buildings Construction Corporation (NBCC) is entering the capital markets with an initial public offer of 1.2 crore equity shares at a price band of Rs 90-106. Though the NBCC offer is small, it is considered very important for the government perspective as it the part of its ambitious divestment target for the fiscal.

Gold loan companies have taken a hit after the Reserve Bank of India came out with curbs on the business, restricting loans to 60% of the jewellery value and bar loans against coins and gold biscuits. Muthoot Finance is down by 11.18% while Manappuram Finance is down by 17 percent.

The top gainers on the Sensex were Coal India up by 2.18 percent, Tata Motors up by 1.63 percent, Wipro up by 1.32%, Hero MotoCorp up by 1.25% and BHEL was up by 1.19%.

On the flip side, Jindal Steel down by 5.15%, maruti Suzuki down by 0.99%, Infosys down by 0.58%, Tata Steel down by 0.48% and Cipla down by 0.36% were the top losers on the Sensex.

Market ignores JLR worries, Essar Oil gains on Vadinar Refinery

10: am Even as Asian shares were seen giving back earlier gains following China’s weak factory activity date on Thursday, the Bombay Stock Exchange at 9.20 am was marginally up up by 12.81 points or 0.07 percent at 17,614.52.

However, the Nifty index reflected Asian sentiment and was down 0.07 percent at 5,361.10 in opening trade.

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Mahindra & Mahindra stocks are slightly up by 4.15 points at 703.05 (or 0.59%) as Tech Mahindra and Mahindra Satyam merger deal inches to a close. The deal will create India’s sixth largest software company.

Essar Oil rises 1.75 percent to Rs. 58.25 on BSE, extending Wednesday’s 4.66 percent rally triggered by the company announcing successful commissioning of its new Vacuum Gas Oil Hydrotreating Unit and Sulphur Recovery Unit at its Vadinar Refinery

Tata Motors was another gainer in the markets this morning. It’s stock stood at 278.30 up, by 2.05 points or 0.74%. This is even as CLSA has retained the ‘Outperform’ rating for the company and and set a target price of Rs 310.

BHEL too saw upward movement at Rs 270.85 - a gain of 0.43 percent. The State-owned BHEL on Tuesday bagged a contract worth Rs 630 crore from a private power company, Abhijeet Projects, for setting up a thermal plant at Vishakhapatnam in Andhra Pradesh.

Other gainers were Hero MotoCorp which was at 1,950, up by 20.70 points; Sun Pharma at 573.35 up 0.92%; SBI at Rs2,242 up by 8.45 points;Coal India at Rs 332.90 was up 1.95 points and ONGC at Rs 272.25 which was marginally up by 0.95 points.

Steel and IT services companies, however, were losers in the markets.

Even as the Steel Authority of India Limited (SAIL) on Wednesday indicated that with imports of steel becoming costlier, the company would have a close look at whether to hike prices or absorb them, Jindal Steel was down 4.77% at Rs 561.25 and Tata Steel dropped 1.18% at Rs 466.30

Technology companies, which draw more than half of their of revenue from the United States, still looked dicey with dragging fiscal and political concerns. Infosys at Rs 2,843.40 was down 23.50 points; TCS lost 9.20 points at Rs 1162.65 and Wipro at Rs 425.05 was down 1.70 points.

But the biggest losers today are gold loan companies like Muthoot Finance and Mannapuram Finance, down 12-36% and 13-06 percent, respectively after the central bank tightened gold loan norms for non-banking financial companies, citing the rapid growth of the business and rising risks.