Home » stock » Japanese tsunami sinks stocks

Friday, March 11, 2011

Japanese tsunami sinks stocks

Japanese tsunami sinks stocks : After opening below the dotted line, the Indian stock market indices witnessed some momentum in the morning session. However, with the earthquake in Japan and sustained worries over crude and food prices, stocks moved further into negative territory. While the BSE-Sensex closed 154 points lower (a 0.8% decline), the NSE-Nifty closed lower by 49 points (down 0.9%). The BSE Midcap and the BSE Small cap indices, however were worse off. They were both trading over 1% lower. Regarding the sectoral indices, metal and IT stocks saw declines. However oil and gas stocks did see some gains, while FMCG stocks remained flat

As regards major global stock markets, all Asian indices were trading in the negative zone. The 8.9 magnitude earthquake and the subsequent tsunami in Japan sent stocks plummeting in the region. The Japanese stock market was the worst hit, falling 1.7%. All European indices also opened in the red. The rupee was trading at Rs 45.28 to the dollar at the time of writing.

In some relief to soaring oil prices, the government is likely to consider the abolition of a 5% customs duty on crude oil. This is in case prices continue move upwards to June 2008 levels. The price of Indian basket of crude stood at around US$ 129 per barrel in June 2008. On Feb 28 2011 (the day of the budget) the price of the basket of crude oil stood at US$ 109.6 per barrel. But oil prices are not seeing any signs of cool off due to continued unrest in the Middle East. Duty on crude contributes around 20% to the customs revenue kitty. If this is abolished, it will impact revenue collections significantly. Rising prices of this natural resource is already putting a huge burden on domestic oil marketing companies(OMCs). So far only petroleum has been deregulated, with other fuels are still subject to government control.

BHEL was one of the top losers in the Sensex today. This is possibly on the back of news that the company may miss its order growth target of Rs 600 bn (US$ 13.2 bn) in its order book for the current fiscal. The engineering company is facing some slowdown in domestic orders. BHEL is hoping to see some large contracts come in by March end, as its customers rush to meet their budgeted spending for the year. However, it may see some of these get pushed into FY12. The company bagged new orders worth Rs 360 bn in 9mFY11. It had an order backlog of Rs 1.6 trillion at the end of December 2010. It is a small comfort that its closest rival L&T had earlier warned that it also may not be able to meet its order book target for the year. Slower mobilization of funds for capex was one of the key reasons for the same. For the latest updates PRESS CTR + D or visit Stock Market news Today

Related Post:

Posted by at
Labels:

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)