Sell-off in PSU stocks still on

A slew of rumours like bidders having run away from SCI’s divestment process and Divestment Minister Arun Shourie planning to put in his papers also led to the downslide. There were also rumours that that Union Shipping Minister Ved Prakash Goyal has expressed his dissent to the Group of Ministers looking into the privatisation issue, that he is not favour of SCI’s sell-off. The Divestment Ministry later denied rumours of Shourie’s resignation.

The SCI scrip tumbled amid heavy volumes of 19.33 lakh shares on the Bombay Stock Exchange (BSE). PSU stocks like Bharat Earth Movers by 9.5 per cent, Dredging Corporation by 8 per cent and Container Corporation by 5.2 per cent were big losers.Among refinery PSU stocks, HPCL shed 3.9 per cent and BPCL lost 2.2 per cent. HMT Ltd, a diversified engineering PSU, fell as much as 18.12 per cent after the Union Industries Minister B.V. Patil was quoted as saying the government had deferred the privatisation of the company.

The stock fell to Rs 16.95, a near four-month low, after reports that the government had put off the sale till the company improves its performance and enables better valuations.

Rumours have also gained ascendance that the government is either not interested in selling off NFL or is against raising fertiliser prices. Last week, 57 PSUs, which account for 27.2 per cent of BSE’s market capitalisation, lost Rs 11,927.91 crore.

Adding fuel to fire, reports that Opposition parties and several trade unions have called for a 12-hour strike in Orissa on Thursday to protest against a decision to privatise aluminium PSU Nalco also affected the sentiment towards PSU stocks.