Sensex Finishes Weak; Tata Steel Down 2.6%

The Indian share markets remained negative and headed for a weak close on fears of likely increase in long term capital gains tax. At the closing bell, the BSE Sensex closed lower by 234 points, whereas the NSE Nifty finished lower by 78 points. The S&P BSE Midcap ended down by 2.2% while the S&P BSE Small Cap finished down by 2.1%. All sector indices ended the day on a negative note. Metalrealty stocks and healthcare stocks witnessed the maximum brunt.

Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.40%, while the Hang Seng led the Nikkei 225 lower. They fell 0.28% and 0.16% respectively. European markets finished mixed as of the most recent closing prices. The CAC 40 gained 0.10% and the FTSE 100 rose 0.06%. The DAX lost 0.05%.

The rupee was trading at Rs 67.83 against the US$ in the afternoon session. Oil prices were trading at US$ 53.23 at the time of writing.

According to an article in The Economic Times, Tata Steel has signed an agreement to acquire Odisha-based iron ore pellet manufacturer Brahmani River Pellets Ltd (BRPL) for Rs 9 billion in cash. BRPL owns a 4 million tons per annum capacity pellet plant in Jajpur and a 4.7 million tons' iron ore beneficiation plat in Bardil, Odisha.

BRPL was originally established by the Moorgate Industries Group (MIG). The company has executed definitive agreements to acquire 100% equity shares of BRPL from Aryan Mining and Trading Corpn Private Ltd (AMTC) and other companies in the MIG.

Further, the acquisition provides an upstream integration opportunity to Tata Steel to meet its metallic requirements and improving the feed mix for its Kalinganagar steel plant and Jamshedpur steel plant. Moreover, the company plans to reduce its freight cost by using BRPL's slurry pipeline to transfer iron ore from its captive mine in the Joda and Khondbond region.

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Disclosure: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Use of the ...

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