The BSE's 30-share Sensex closed 0.07%, or 17.47 points, higher at 26,437.02 points, while the National Stock Exchange's broader 50-share Nifty shed 0.09%, or 6.90 points, to close at 7,906.30 points. Photo: Mint
Mumbai: Indian shares surrendered all-time highs recorded earlier in the day after the Supreme Court declared coal block allocations between 1993 and 2010 as illegal.
Shares of all companies that were allocated the blocks tumbled, with the verdict casting uncertainty over the fate of these blocks. Other companies which are dependent on such blocks to start and maintain their projects fell as well.
The Bombay Stock Exchange's 30-share Sensex closed 0.07%, or 17.47 points, higher at 26,437.02 points, while the National Stock Exchange's broader 50-share Nifty shed 0.09%, or 6.90 points, to close at 7,906.30 points.
Earlier in the day, Sensex had gained 0.8% or 211.19 points to record a new high of 26,630.74 points, while the Nifty advanced 0.7% or 55.05 points to log an all-time high of 7,968.25 points.
"There is a lot of ambiguity with regard to what next after the SC decision on coal block allocation," said Vaibhav Sanghavi, managing director of Ambit Investment Advisors Pvt. Ltd, adding that the Nifty appeared to be facing some resistance at the 8,000-level.
"Some people may not want such ambiguity in their portfolio and sold such stocks which are impacted by the decision, and that dragged the market down," added Sanghavi.
Deven Choksey, managing director and CEO of K.R. Choksey Shares and Securities Pvt. Ltd agreed.
"Unfortunately, this is a situation of great uncertainty. This could result in delays in implementing some of the projects, if it is not quickly resolved," said Choksey.
As many as 289 blocks have been awarded since 1993 across a mix of large, medium and small companies in the metals, power and resources sector, according to data from coal ministry.
Shares of metal companies, which were awarded coal blocks, were the worst hit. The BSE Metal Index dropped 4.8%, the most since August 2013.
The coal block allocations had led to a reported Rs.1.76 lakh crore windfall gain for private companies.
The court will decide on whether to cancel the allocations in hearings which continue from 1 September.
"All eyes are now set on what happens on 1st September. Only then we will know with clarity, as to what are the consequences of today's SC decision," said Sanghavi of Ambit.
The BSE Bankex, BSE Healthcare, BSE IT and BSE auto indices touched new records during the day, though the late selling erased some gains. BSE Healthcare, BSE IT and BSE Auto Index closed 0.5%, 1% and 0.4% higher respectively, while the Bankex closed 0.9% lower.
Shares of airline companies dived, haunted by tax and debt woes.
Sensex has risen 24.88% so far in 2014, on the back of net inflows of $12.64 billion in Indian equities from foreign institutional investors (FIIs).
Ruchira Singh and Ravindra Sonavane contributed to this story
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