Shares of ten metal and mining companies fell by 0.29% to 4.33% at 13:25 IST on BSE amid renewed global growth concerns in the wake of weaker-than-expected Chinese manufacturing data.
Vedanta (down 2.14%), National Aluminium Company (down 4.16%), Hindalco Industries (down 4.33%), Hindustan Zinc (down 1.62%), Steel Authority of India (down 4.23%), NMDC (down 0.67%), Hindustan Copper (down 0.55%) and JSW Steel (down 2.08%) declined.
Tata Steel lost 4.25% at Rs 333.65. Global metals group Liberty House Group yesterday, 3 May 2016, formally submitted a letter of intent to Tata Steel Europe containing its indicative bid for the entire issued share capital of Tata Steel UK. Liberty has put in the bid for all of Tata Steel's UK assets, excluding its Long Products division, which is in the process of being sold separately, and the Scottish Plate Assets that Liberty already acquired from Tata Steel. Tata Steel has put Tata Steel, UK on the block due to the deteriorating financial performance of the UK subsidiary.
The bid is based on Liberty's GREENSTEEL business model and would involve a transition from steelmaking in blast furnaces to recycling steel in electric arc furnaces over time while ensuring the company continues to meet key customers' quality requirements. Steelmaking would be ultimately powered by renewable energy sources. Liberty said in a statement that it believes that the UK steel industry can achieve long-term viability if based on an agile, sustainable, non-cyclical model which integrates liquid steel making from recycling with downstream production and the manufacture of advanced engineering products.
In order to take the bid forward Liberty has appointed an internal project team and a panel of leading external advisers to work on this acquisition, dubbed "Project GREENSTEEL Pluto".
Jindal Steel & Power (JSPL) fell 0.29% to Rs 68.80. The stock hit a high of Rs 71.45 and a low of Rs 67.25 so far during the day. The company's board of directors at its meeting held yesterday, 3 May 2016, approved the divestment of 1,000 megawatts (MW) power plant unit in Chhattisgarh of its power subsidiary Jindal Power (JPL) into a special purpose vehicle (SPV), for purposes of transferring the unit to JSW Energy through sale of the entire share capital and other securities of the unit in terms of the share purchase agreement for an enterprise value of Rs 6500 crore plus the value of net current assets as on the closing date. The valuation may vary based upon the achievement of power purchase agreements (PPAs) as prescribed in the agreement subject to minimum of Rs 4000 crore plus the value of net current assets as on the closing date, JSPL said in a statement. The announcement was made before market hours today, 4 May 2016.
The S&P BSE Metal index was off 2.19% to 7,758.43, underperforming the S&P BSE Sensex which was off 0.05% at 25,217.11.
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High Grade Copper for July 2016 delivery was currently up 0.07% at $2.2205 per pound on the COMEX.
On the global economic front, the Caixin China general manufacturing purchasing managers' index fell to 49.4 in April 2016 from 49.7 in March 2016. A reading below 50 indicates economic contraction. The data was released during trading hours in Asia yesterday, 3 May 2016. China's official manufacturing PMI, a competing gauge, came in at 50.1 in April 2016 compared with 50.2 in March 2016, according to data released by the National Bureau of Statistics on 1 May 2016. The Chinese economy is the world's second biggest economy after the United States.
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