The Telegraph
Saturday , August 18 , 2012
Since 1st March, 1999
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Sensex succumbs to triple jolt

Mumbai, Aug. 17: After rising over 140 points, the Sensex today gave up most of its gains and closed just 34 points higher as sentiments turned sour after a CAG report found anomaly in government’s coal allocation. The report named Jindal Steel and Tata Power among the firms that were likely to benefit from the coal blocks allocated on a nomination basis.

In a separate report, the CAG said RPower got undue benefit of Rs 29,033 crore when the government allowed the use of surplus coal from blocks allotted to the Sasan power plant for other projects.

The Reliance Power stock dropped 5.6 per cent. Tata Power declined 3.71 per cent, Jindal Steel Power lost 4.02 per cent and Hindalco fell 2.5 per cent.

Shares of GMR Infra tanked over 3 per cent after the CAG accused the civil aviation ministry of violating bid conditions for the benefit of GMR-led Delhi International Airport Ltd.

“Markets ended flat, reversing the earlier gains of the day. The CAG reports on coal, power and aviation impacted sentiments,” said Dipen Shah, head of fundamental research, Kotak Securities.

After rising to a high of 17801.39, the BSE benchmark index dipped to a low of 17622.62, after the CAG said private firms were likely to have gained about Rs 1.86 lakh crore from coal blocks allocated on a nomination basis, which amounted to a notional loss to the national exchequer.

However, the Sensex ended 33.87 points higher at 17691.08 points, helped by buying in Tata Motors, Infosys, HUL and ITC. The 50-share NSE index Nifty closed 3.35 points higher at 5366.30.

Tata Motors led the 16 gainers on the Sensex today in the wake of reports of higher global sales.

Maruti settled with marginal gains following the announcement yesterday that production would resume at the Manesar plant from August 21.

Traders said investors also appeared to have ignored the projection of a higher growth rate of 6.7 per cent in 2012-13 made by the Prime Minister’s key advisory body earlier today.