Power, metal shares weak ahead of Supreme Court’s coal block decision

Banking shares also fell as many lenders have financed these power, mining and steel companies and if the apex court imposes a penalty or cancels the allocations, many loans could turn bad. Photo: Bloomberg

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Mumbai: Shares of power, metal and banking companies traded weak ahead of the Supreme Court’s verdict in the coal block allocation case expected later in the day. The apex court had ruled on 25 August that all coal block allocations between 1993 and 2010 were illegal. On 8 September, the government filed an affidavit in the Supreme Court, leaving the final decision to the court. The government also requested the court to spare 46 coal mines, of which 40 are functional and six are about to become operational. Earlier, power minister Piyush Goyal had said that the government was not worried about cancellations, saying it would only lead to a short-term disruption of power generation. The government, Goyal had said, was ready to re-auction the blocks in such an eventuality. Metal and power shares were trading lower on fears that heavy penalties or cancellations could sharply raise the cost of production and affect profits. Among metals companies, Steel Authority of India Ltd fell 1.7%, Sesa Sterlite Ltd fell 1.3%, JSW Steel Ltd fell 1%, Hindalco Industries Ltd fell 1%, Jindal Steel and Power Ltd fell 0.8%. The BSE Metal Index fell 0.8%. Power companies were also hit, with the BSE Power Index shedding 0.2%. Torrent Power Ltd fell 3.3%, Adani Power Ltd 1.2%, GMR Infrastructure Ltd 1.2%, Jaiprakash Power Venture Ltd 1.1%, Bharat Heavy Electricals Ltd (Bhel) 1.1%, JSW Energy Ltd 1%, Reliance Power Ltd 1%, PTC India Ltd 1%, CESC Ltd 0.6% and NTPC Ltd 0.3%. Banking shares fell as many lenders have financed these power, mining and steel companies and if the apex court imposes a penalty or cancels the allocations, many loans could turn bad. The Federal Bank Ltd fell 1.4%, ICICI Bank Ltd fell 1%, Punjab and National Bank fell 0.6%, Yes Bank Ltd fell 0.5%, Bank of Baroda fell 0.5%, Axis Bank Ltd fell 0.5%, Bank of India fell 0.4%. The BSE Bankex fell 0.5%.

Read more at: http://www.livemint.com/Money/z4Q8bgxkyApsojkVAAvWsM/Power-metal-shares-weak-ahead-of-Supreme-Courts-coal-block.html?utm_source=copy

Banking shares also fell as many lenders have financed these power, mining and steel companies and if the apex court imposes a penalty or cancels the allocations, many loans could turn bad. Photo: Bloomberg 

  

Mumbai: Shares of power, metal and banking companies traded weak ahead of the Supreme Court’s verdict in the coal block allocation case expected later in the day. The apex court had ruled on 25 August that all coal block allocations between 1993 and 2010 were illegal. On 8 September, the government filed an affidavit in the Supreme Court, leaving the final decision to the court. The government also requested the court to spare 46 coal mines, of which 40 are functional and six are about to become operational.

 Earlier, power minister Piyush Goyal had said that the government was not worried about cancellations, saying it would only lead to a short-term disruption of power generation. The government, Goyal had said, was ready to re-auction the blocks in such an eventuality. 

Metal and power shares were trading lower on fears that heavy penalties or cancellations could sharply raise the cost of production and affect profits. Among metals companies, Steel Authority of India Ltd fell 1.7%, Sesa Sterlite Ltd fell 1.3%, JSW Steel Ltd fell 1%, Hindalco Industries Ltd fell 1%, Jindal Steel and Power Ltd fell 0.8%. The BSE Metal Index fell 0.8%. 

Power companies were also hit, with the BSE Power Index shedding 0.2%. Torrent Power Ltd fell 3.3%, Adani Power Ltd 1.2%, GMR Infrastructure Ltd 1.2%, Jaiprakash Power Venture Ltd 1.1%, Bharat Heavy Electricals Ltd (Bhel) 1.1%, JSW Energy Ltd 1%, Reliance Power Ltd 1%, PTC India Ltd 1%, CESC Ltd 0.6% and NTPC Ltd 0.3%. Banking shares fell as many lenders have financed these power, mining and steel companies and if the apex court imposes a penalty or cancels the allocations, many loans could turn bad. 

The Federal Bank Ltd fell 1.4%, ICICI Bank Ltd fell 1%, Punjab and National Bank fell 0.6%, Yes Bank Ltd fell 0.5%, Bank of Baroda fell 0.5%, Axis Bank Ltd fell 0.5%, Bank of India fell 0.4%. The BSE Bankex fell 0.5%.

PRASHANT SHARMA

PGDM -IIIsem

Banking shares also fell as many lenders have financed these power, mining and steel companies and if the apex court imposes a penalty or cancels the allocations, many loans could turn bad. Photo: Bloomberg

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