 "Markets snap day's gains as CAG report scares investors")
The key Indian indices, after trading jubilantly in the first half, erased almost their day’s gains, snapping the session nearly unchanged after the CAG found irregularities in the government’s coal allocation and usage.
The Sensex provisionally ended up 0.19 percent at 17,691.08 points, while the 50-share NSE index rose 0.06 percent to end at 5,366.30 points. Sentiments turned bearish after the government tabled the controversial CAG reports on coal blocks, Delhi airport and UMPPs in the parliament. CAG report cited that the coal scam is bigger than 2G case. The report pointed out that the presumptive loss to government stands at Rs 1.86 lakh crore in scam, which is quite higher than the notional loss of Rs 1.75 lakh crore due to 2G scam.
[caption id=“attachment_421571” align=“alignleft” width=“380”]
Reuters[/caption]
Consequent to the CAG report, Power sector, after trading in the green, ended negative with a fall of over one and half a percent and private power producers like Tata Power, RPower, Adani Power, GMR Infra and Reliance Infrastructure topped the selling list with fall of over 3 percent on CAG report stating that the loss was due to allocation of coal mines to private players. Meanwhile, Aviation sector stocks like Spicejet, Jet Air India and Kingfisher Airlines all edged lower in the session after the CAG report.
“The undercurrent was affected amid concerns about the possible political fallout of the three CAG reports. Some experts say that the series of corruption cases will hurt the prospects of the Congress-led coalition in the 2014 Lok Sabha election,” says Amar Ambani, Head of Research, IIFL.
Realty, Power, Metals and Capital Goods indices were the major laggards, while FMCG, IT, Telecom and Auto stocks bucked the negative trend.
The Mid-Cap and Small-Cap indices remained almost unchanged.
ITC rose 1.7 percent recovering from its 3.5 percent fall in the previous session.
Reliance Power fell more than 5.8 percent on Friday after the country’s federal auditor said the company unduly benefited from a government decision allowing the power producer to use surplus coal from its captive block for another project it was not meant for.