Indian equity markets have continued in green during the previous two hours of trade. The most noticeable upward movement has been witnessed in the Software sector while the Auto sector is facing maximum selling pressures.
Sensex is up by 140 points and NSE-Nifty is up by 37 points. BSE Mid Cap and BSE Small Cap indices are trading higher by 0.23% and 0.22% respectively. The rupee is trading at 54.67 to the US dollar.
Real Estate/ Construction stocks are trading on a mixed note with Madhucon Projects and Mahindra Lifespace leading the gains while Brigade Enterprises and Ansal Housing are facing selling pressures. According to a leading financial daily, infrastructure major, IVRCL Ltd has stopped work on the 32 Megawatt Rahughat Hydroelectric project in Nepal, which it won in 2010. The original contract was for Rs 300 crore and IVRCL claims that the estimated costs have gone up substantially since 2010. The work order was given to IVRCL two years ago. Sources indicate that IVRCL has put in a demand for a minimum increase of 10% over the original cost of Rs 300 crore. While the work order was given to IVRCL two years ago, work was not started as the Nepalese government asked IVRCL not to start the work until a Project Monitoring Cell (PMC) got established. The PMC got established only a month back and thus IVRCL is reluctant to start work at two year old rates. IVRCL has requested the Nepalese government to consider its claim with regard to escalation. Under the current circumstances, the project is unlikely to meet its 2014 completion deadline.
Energy stocks are continuing their northward movement with Oil and Natural Gas Corporation (ONGC) and Essar Oil leading the gains. State run gas utility Gas Authority of India Limited (GAIL) plans to spend Rs 90 bn in capital expenditure in the next fiscal, most of which will be used to complete the many on-going projects, as per a leading daily. Most of the proposed Rs 90 bn capex would be used for laying more pipelines and expansion of the petrochemicals project at Pata in Uttar Pradesh. Gail had planned a similar capital expenditure in the current fiscal, but is likely to end the year with a spending of Rs 65 bn only. The lower than expected capex in this fiscal is due to the savings in some of the ongoing projects and phasing out of some other projects. A part of next fiscal's capital expenditure budget would also be pumped in as equity in the Dabhol LNG terminal, which was commissioned over the weekend. The Dabhol terminal would be doubled to 10 million tonnes per annum over the next three-four years at an investment of around Rs 30 bn. The first phase would expand the capacity to 7.5 million tonnes per annum from the present 5 million tonnes per annum. The second phase would take up the expansion to 10 million tonnes per annum from 7.5 million tonnes per annum.