Indices in the Indian stock market gave up most of their gains during the end of the day and while the Sensex closed marginally higher, Nifty closed the day on a flat note. The Sensex edged higher by around 20 points. The BSE Midcap and small-cap indices managed to stay in the positive right until the end and ended up marginally higher. The advance to decline ratio on the Sensex came in the favor of the former as more than three stocks gained for every decline.
While Asian indices closed mixed, Europe was trading largely in the negative. The rupee was seen trading at Rs 44.5 to the dollar at the time of writing.
As per a leading business daily, the FPO of oil exploration and production major ONGC may not see the light of the day before mid-August. The FPO, which was first scheduled to hit the markets in FY11, was delayed to April owing to regulatory issues. It was then postponed to July and now has been again deferred until August. The wavering on the part of the government could also be on account of the mechanism of subsidy sharing on oil prices as there is no transparency as of now. It is expected that the first quarter results of the company will tell us something about the government mood on subsidy sharing. After the FPO, the government stake is likely to come down to around 69% from the current 74%. In all, a total of Rs 115 bn is targeted to be raised through the issue. The stock of the company closed lower on the bourses today.
Power sector financing companies like PFC and RE witnessed some strong buying today and emerged among the highest gainers in the BSE A group. The strong positive sentiment was the result of the government decision to implement a set of measures to bring down the losses of power distribution companies. It was reported that the state governments would consider converting loans due from them to the distribution utilities into state government equity so that capital infusion is ensured as also the improvement of net worth. This should help lenders like PFC and REC as it was being assumed that the poor financial state of distribution companies would force them to take a hair cut. Having said that, there is still a long way to go, we believe.