Sensex Ends at Record High, Metals Crash on Coal Verdict

The Nifty edged lower on Monday after hitting a second consecutive record high as gains in blue chips such as Tata Consultancy Services were offset by a slump in resources firms following the Supreme Court's ruling on coal allocations.

The top court on Monday held as illegal all coal blocks allocated by the government to various firms between 1993 and 2009, adding that a final decision on the fate of the blocks would be taken next week.


Caution is also expected to prevail ahead of the expiry of derivatives on Thursday and gross domestic product data due on Friday. India may also post current account deficit data sometime this week.

But analysts do not expect any big retreat in shares as foreign investors remain bullish on Indian shares. Overseas funds bought shares worth Rs. 300 crore on Friday, according to provisional data, bringing their totals for the year to $12.8 billion.

"Overall the market is stable. Coal block allocation news has created some uncertainty but continued foreign flows would negate its impact," said Deven Choksey, managing director at K R Choksey Securities.

The broader Nifty fell 0.09 per cent, or 6.90 points, to 7,906.30, snapping a two-session winning streak after earlier hitting a record high of 7,968.25.

However, the benchmark Sensex gained 0.07 per cent, or 17.47 points, to end at 26,437.02, enough to post its third consecutive session of gains. The index earlier hit a record high of 26,630.74.

Fall in the Nifty was led by a slump in resources firms after the top court ruling. About 200 coal blocks were awarded over the period to private steel, cement and power companies for their own consumption.

Jindal Steel and Power slumped 13.9 per cent, while Hindalco Industries dropped 9.7 per cent.

Tata Steel fell 4.8 per cent, while Sesa Sterlite lost 4 per cent.

The falls offset gains in blue chips, including a 2.4 per cent gain in Tata Consultancy Services and 1.8 per cent in Hindustan Unilever.

Among other stocks that gained, Maruti Suzuki India gained 1.9 per cent after Credit Suisse raised its target price to Rs. 3,500 from Rs. 3,020, citing optimism about its product launches and margin expansion potential.