Markets pare most of their losses; realty stocks surge

The domestic markets have gathered courage and have pared most of their losses in the mid morning session. The benchmarks are now moving in the flat terrain supported by good bounce back in the realty, auto and consumer durable sectors, though the global markets continue to trade mixed with some of the Asian markets marginally in red. Back home, the mining stocks are still under pressure led by Coal India which is still down by over 5% after the group of ministers on the new Mines and Minerals (Development & Regulation) Bill, 2010; (MMDR) proposed that non-coal mining companies should pay 100% royalty to people affected by a project, while the Coal mining companies should pay 26% of their net profit to the affected populace. Coal India will have to cough up around Rs 5,000 crore if the draft mining policy proposal gets implemented. The banking gauge was trading lower led by decline in some of the private sector banks, while the PSU banks were trading higher ahead of a Finance Minister meeting with heads of public sector banks and financial institutions to review their annual performance.

The BSE Sensex is currently trading at 19,051.30, down by 27.00 points or 0.14%. The index has touched a high and low of 19,131.70 and 18,962.47. There were 19 stocks advancing against 11 declines on the index.

The broader indices too were showing the sign of recovery; the BSE Mid cap and Small cap indices were down by 0.02% and 0.20% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.98%, Auto up by 0.76%, CD up by 0.55%, Power up by 0.28% and TECk was up by 0.26%.

While, on the losers side, Metal was down by 2.14%, PSU was down by 0.80%, Oil & Gas was down by 0.59%, CG down by 0.36% and Bankex was down by 0.20% on the BSE.

The top gainers on the Sensex were DLF up by 2.33%, Rel Infra up by 1.38%, Bharti Airtel up by 1.37%, ONGC up by 1.33% and Hero Honda was up by 1.30%.

On the flip side, Sterlite Industries down by 3.88%, Hindalco Inds down by 1.89%, Jindal Steel down by 1.75%, ICICI Bank down by 1.68% and Jaiprakash Associates down by 1.58% were the top losers on Sensex.

Meanwhile, the new mining Bill - approved by a 10-member Group of Ministers (GoM) headed by Finance Minister Pranab Mukherjee, approved the Daft Mines and Mineral Development and Regulation (MMDR) Bill 2011, which recommends to make it compulsory for coal miners to share their 26% of profits to project affected people, whereas companies mining other resources like iron ore, bauxite and limestone, will be required to pay 100% of royalty on their production on the original inhabitants of the projects.

The MMDR bill, approved by GoM will be sent to cabinet for approval. The bill requires parliamentary approval after passing by cabinet to become a law. It will be applicable to new projects. Earlier, the ministry of coal has opposed the linking of profit sharing to royalty. Coal Minister Prakash Jaiswal had said that this would impact the profitability of coal companies. 

This move of government is not liked by the industrial bodies, as the decision of profit sharing will reduce the revenue of companies and increase the business cost. The 26% of profit sharing would cost around Rs 9,000 crore to the mining industry. However, the decision of profit-sharing is expected to make it easier for mining projects to win local approval and accelerate the pace of developments. Years of protests, have delayed many industrial projects, including South Korean steel maker POSCO's plant in Orissa, the biggest foreign direct investment in India at $12 billion.

India's mining sector has only opened up fully to private investors in recent years and state-run companies have lacked the funds and expertise to probe deeper than the top 50 metres or so where its iron ore and coal reserves are found.

The S&P CNX Nifty is currently trading at 5,716.05, down by 12.90 points or 0.23%. The index has touched a high and low of 5,740.40 and 5,689.10 respectively. There were 24 stocks advancing against 26 declines on the index.

The top gainers of the Nifty were Siemens up by 2.59%, DLF up by 2.33%, Ranbaxy up by 1.79%, ONGC up by 1.53% and Bharti Airtel was up by 1.38%.

On the flip side, Sterlite Industries down by 4.11%, Sesa Goa down by 3.51%, SAIL down by 2.36%, BPCL down by 1.97% and Hindalco down by 1.71% were the major losers on the index.

Asian markets were trading mixed; Shanghai Composite was up by 0.08%, Hang Seng added 0.86%, Nikkei 225 gained 0.66%, Jakarta Composite surged 1.42% and Straits Times rose by 0.60%

On the flip side, KLSE Composite declined by 0.24%, Seoul Composite was marginally down by 0.01 and Taiwan Weighted descended 0.27% 

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