Key benchmark indices were trading lower in early trade, tracking negative leads from Asian markets. At 9:20 IST, the barometer index, the S&P BSE Sensex, was down 72.76 points or 0.25% at 29,348.64. The Nifty 50 index was currently down 21.70 points or 0.24% at 9,086.30.
Among secondary barometers,the BSE Mid-Cap index was currently up 0.24%. The BSE Small-Cap index was currently up 0.29%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 800 shares rose and 483 shares fell. A total of 79 shares were unchanged.
Overseas, Asian stocks were mostly lower after US President Donald Trump suffered a legislative defeat on Friday, 24 March 2017, when Republican leaders pulled a bill to overhaul the US health care system with the dollar weaker and gold prices up.
US stocks ended lower on Friday, 24 March 2017, as House Republicans withdrew the American Health Care Act after determining that they did not have enough votes to pass the bill. The withdrawal is a major setback for President Donald Trump who had made the repeal and the replacement of the existing Affordable Care Act one of his main campaign pledges.
Back home, housing finance major HDFC was up 0.14%. The company said it has completed the issuance of masala bonds aggregating Rs 3300 crore (Rs 2000 crore issue plus green shoe option) on Friday, 24 March 2017. The bonds issue received a strong response from 29 investors across Asia and Europe. The aggregate demand for the transaction was 2.16 times at Rs 4315 crore. The announcement was made after market hours on Friday, 24 March 2017. The issue size is Rs 3300 crore with a yield of 7.35% per annum payable semi-annually. The maturity date of bonds is 30 April 2020.
Reliance Industries (RIL) was down 1.26%. The company said that the Securities and Exchanges Board of India (Sebi) has uploaded in its website its order in the matter relating to trading in RPL shares by RIL in November 2007. The trades in RPL shares which were examined by Sebi were genuine and bona fide transactions, RIL said. These were carried out keeping the best interest of the company and its shareholders, in view, it added.
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RIL said that Sebi appears to have misconstrued the true nature of the transactions and imposed unjustifiable sanctions. RIL said it is in the process of consulting its legal advisors. It proposes to prefer an appeal and challenge the order in Securities Appellate Tribunal. RIL said it remains confident of fully justifying the veracity of the transactions and vindicating its stand. RIL said that it has full confidence in the judicial process and it proposes to vigorously exercise all options available to it to challenge the untenable findings in the order. The announcement was made after market hours on Friday, 24 March 2017.
Coal India was down 1.66%. The Competition Commission of India (CCI) has found Coal India (CIL) and its subsidiaries to be in contravention of the provisions of Section 4(2)(a)(i) of the Competition Act, 2002 for imposing unfair/discriminatory conditions in Fuel Supply Agreements (FSAs) with the power producers for supply of non-coking coal.
The final order has been passed on a batch of informations filed by Maharashtra State Power Generation Company and Gujarat State Electricity Corporation against Coal India and its subsidiaries (Mahanadi Coalfields Ltd., Western Coalfields Ltd., South Eastern Coalfields Ltd.).
The order has been passed by CCI pursuant to the directions issued by Competition Appellate Tribunal remanding the matter back while setting aside the original order of CCI in which a penalty of Rs 1773.05 crore had been imposed upon CIL. After hearing the parties afresh in terms of the directions issued by Competition Appellate Tribunal, CCI held that CIL through its subsidiaries operates independently of market forces and enjoys dominance in the relevant market of production and supply of non-coking coal in India.
CCI noted in the order that CIL did not evolve/ draft/ finalize the terms and conditions of FSAs through a bilateral process and the same were imposed upon the buyers through a unilateral conduct. CCI found CIL and its subsidiaries to be in contravention of the provisions of Section 4(2)(a)(i) of the Competition Act, 2002 for imposing unfair/ discriminatory conditions in FSAs with the power producers for supply of non-coking coal.
Apart from issuing a cease and desist order against CIL and its subsidiaries, CCI has directed modification of FSAs in light of the findings and observations recorded in the order. The impugned clauses related to sampling and testing procedure, charging transportation and other expenses for supply of ungraded coal from the buyers, capping compensation for supply of stones etc.
For effecting the modifications in FSAs, CIL has been ordered to consult all the stakeholders. CIL has also been directed to ensure uniformity between old and new power producers as well as between private and PSU power producers.
Further, CCI has imposed a penalty of Rs 591.01 crore upon CIL for the abusive conduct. While reducing penalty, CCI noted the steps taken by CIL to improve the sampling procedure even post-passing of the original order by CCI.
However, while holding the extant sampling procedure as unfair, CIL has been directed to incorporate suitable modifications in fuel supply agreements to provide for a fair and equitable sampling and testing procedure besides considering the feasibility of sampling at the unloading-end in consultation with power producers and adopting international best practices. The announcement was made after market hours on Friday, 24 March 2017.
India;s largest cigarette maker by sales ITC was down 0.43%. Government through specified undertaking of the Unit Trust of India (SUUTI) has divested 2% shares of the total shares of ITC to LIC through block trade on 7 March, 2017. Government has received an amount of Rs 6682 crore from this transaction. Disinvestment of Government of India equity is under taken as per the disinvestment policy of the GoI keeping in view the resource requirement of the Government and the prevailing market condition. This was stated by Arjun Ram Meghwal, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha on Friday, 24 March 2017.
On the economic front, the government is likely to table supplementary goods and services tax (GST) legislations in Parliament today, 27 March 2017. Central GST (C-GST), integrated GST (I-GST), Union Territory GST (UT-GST) and the compensation law are likely to be introduced in the Lok Sabha today, 27 March 2017, and could be taken up for discussion as early as 28 March 2017, media reports suggested.
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