Aug. 26 (Bloomberg) -- Indian stock-index futures were little changed after the underlying gauge fell for the first time in three days yesterday.
SGX CNX Nifty Index futures for August delivery declined less than 0.1 percent to 7,916 at 9:33 a.m. in Singapore. The CNX Nifty Index dropped 0.1 percent to 7,906.30 yesterday. The S&P BSE Sensex gained 0.1 percent. The Bank of New York Mellon India ADR Index of U.S.-traded shares lost 0.5 percent.
Most Indian stocks fell yesterday after the nation’s highest court ruled that giving away coal mines to companies without auctioning since 1993 was illegal. The annulment of mining rights may lead to fuel shortages and undermine Prime Minister Narendra Modi’s aim to revive economic growth and curb blackouts.
“It remains to be seen what the final outcome and consequences imposed on firms will be until the Supreme Court adjourns on Sept. 1,” Raghu Kumar, cofounder of RKSV Ltd., wrote in an e-mail. “Firms like Hindalco and Jindal Steel have enjoyed special advantages by getting unique allocation rights for coal blocking.”
The policy of allocating 218 mines for captive use to companies including Hindalco Industries Ltd. and Jindal Steel & Power Ltd. without auctioning them didn’t follow transparent norms, a three-judge bench headed by Supreme Court Chief Justice R.M. Lodha said yesterday, after a report by the nation’s main investigating agency. The court will hear arguments on Sept. 1 regarding termination of mining licenses.
Hindalco slumped 10 percent yesterday, the most since November 2009. Jindal tumbled 14 percent, the biggest loss since June 11, 2013. Tata Steel Ltd. fell 4.8 percent, the largest decline since March 11.
Inadequate coal output has prompted companies to seek supplies overseas, as state producer Coal India Ltd. battles slow land acquisition and government approvals.
“The ruling has brought in uncertainty and if the situation prolongs, it could severely strain coal supplies to customers,” said Deven Choksey, managing director at K.R. Choksey Shares & Securities Pvt. in Mumbai.
Foreign investors bought a net $50.4 million of Indian stocks on Aug. 20, extending this year’s inflow to $12.6 billion, the most among eight Asian markets tracked by Bloomberg.
The Sensex has jumped 25 percent this year and trades at 15.5 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s multiple of 11.3.
To contact the reporter on this story: Santanu Chakraborty in Mumbai at firstname.lastname@example.org
To contact the editors responsible for this story: Michael Patterson at email@example.com Matthew Oakley, Phani Varahabhotla