The Telegraph
Since 1st March, 1999
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Markets go fretting, PSUs turn pariahs

Mumbai, Sept. 16: Selloff shenanigans mauled markets today as investors queasy about prospects for disinvestment shunned shares of state-owned companies.

Reports about political opposition to the privatisation of National Aluminium Company (Nalco) and growing resistance to the sale of National Fertiliser (NFL) by Union fertiliser minister Sukhdev Singh Dhindsa set off alarm bells in a market already on pins and needles about the government’s reform resolve.

Nerves tingled further when rumours about Arun Shourie’s resignation — later swatted by the disinvestment minister and BJP top-guns — swirled around. Companies like Engineer’s India, Rashtriya Chemical and Fertilisers (RCF) and Shipping Corporation of India (SCI) saw their shares bruised. According to market watchers, the SCI scrip fell by close to 14 per cent due to fears that its disinvestment would be delayed, and a buzz that one of the company’s liners was attacked in Iraq. Unconfirmed reports suggested the government might consider waiving the 20 per cent public open offer for the successful bidder.

Other PSU stocks that took a pounding were BPCL and HPCL, Balmer Lawrie, BEML, CCI, HMT and Dredging Corp. Sources said one of the big reasons why HPCL and BPCL suffered were fears that Sunday’s hike in petroleum prices would not be enough to keep their marketing margins in good shape.

“The margins of these companies are Rs 850 per kilolitre and not Rs 1000 per kilolitre respectively. It could have gone up had prices been raised by a rupee,” said an analyst.

The knock to public sector undertakings weighed down the sensex by 22.93 points. The 30-share index opened higher at 3107.89 and peaked at 3109.91. However, it met with strong resistance at higher levels and fell back to a low of 3072.43, before ending at 3076.01.

Among other scrips, a moderate fall was seen in ITC, Infosys, Satyam Computers, MTNL, Reliance and ACC. The volume of business on BSE declined to Rs 922.83 crore from Rs 968.23 crore on Friday. Satyam Computer topped the list of traded securities with a turnover of Rs 103.65 crore followed by United Phosphorus (Rs 85.65 crore), Infosys (Rs 71.17 crore), Mastek (Rs 62.09 crore) and Hinduja TMT (Rs 49.99 crore).

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