Indices in the equity market in India went into a free fall during the closing stages of the day. As a consequence, they closed marginally in the red. The BSE-Sensex edged lower by around 50 points whereas NSE-Nifty lost in the region of 15 points (down 0.3%). BSE Mid Cap index also lost to the tune of 0.2% but BSE Small Cap bucked the trend and closed higher by a similar margin. Nearly three stocks for every two stocks closed lower on the Sensex today.
While most Asian indices closed firm today, Europe too is trading in the positive currently. The rupee was poised at Rs 55.8 to the dollar at the time of writing.
If you are wondering what happened to the markets all of a sudden, especially since they were cruising along since morning, let us tell you that the sudden decline had perhaps to do with the shocking statement from the ratings agency S&P's. If reports are to be believed, the agency has warned that India could become first of the BRIC nations to have a non-investment grade rating. Slowing GDP growth and political roadblocks to economic policymaking were cited as the key reasons behind the warning. Thus, the spate of bad news just doesn't seem to come to an end for India. However, some solace could be taken from the fact that the warning was just the thing that India's policymakers needed in order to jolt them into action. Whether they will rise to the challenge remains to be seen.
National Aluminium Corperation Limited (NALCO), one of India's largest aluminium manufacturers is in talks with Nuclear Power Corporation of India (NPCIL) to increase its stake in the nuclear power JV that it has entered into with the latter. NALCO wants to take its stake to 49% from the currently held 26%. As per the pact, the JV will have a base capital of Rs 10 bn which would be enhanced to Rs 38 bn. The JV is working towards setting up a 1,400 MW units in Surat district of Gujarat. The estimated project cost is believed to be Rs 115 bn. NALCO closed marginally lower on the bourses today.