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CAG effect:Tata Power, Hindalco, Reliance Power stocks plunge

PTI 17 Aug 2012, 18:22:26 IST
Mumbai, Aug 17: After rising over 140 points in the day, Sensex today gave up most gains and closed just 34 points up as sentiment turned sour after the CAG pegged loss in coal allocation at Rs 1.86 lakh crore and named Jindal Steel, Tata Power and Hindalco amongst firms which got blocks.

In a separate report, the CAG said RPower got undue benefit of Rs 29,033 crore when the government allowed use of surplus coal from blocks alloted to Sasan power plant for other projects. Reliance Power dropped 5.6 per cent.

Tata Power declined by 3.71 per cent, Jindal Steel Power lost 4.02 per cent and Hindalco fell 2.5 per cent, after CAG said it has found irregularities in the government coal allocation and usage.

Slamming the levy of development fee on passengers using Delhi Airport, the CAG also said today that the Civil Aviation Ministry violated bid conditions for the benefit of GMR-led DIAL to the tune of over Rs 3,415 crore. Shares of GMR Infra tanked over 3 per cent.

“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 17,801.39, the BSE benchmark index dipped to a low of 17,622.62, after the CAG said private firms are likely to have gained about Rs 1.86 lakh crore from coal blocks allocated on nomination basis, which amounted to notional loss to national exchequer.

However, helped by buying in Tata Motors, Infosys, HUL and ITC, the Sensex concluded 33.87 points up at 17,691.08.  Similarly, the 50-share NSE index Nifty closed 3.35 points higher at 5,366.30.

Tata Motors led the 16 gainers in Sensex today after reports said the company's global sales rose. Maruti settled with marginal gains after it announced yesterday that production will resume at Manesar plant from August 21.

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