After a choppy session up till noon, the Indian indices finally gained some strong headway on the back of firm buying interest in heavy weights. Stocks from the IT and FMCG space are trading firm, while stocks from the realty, power and metal space are trading weak.
The BSE-Sensex is up by 98 points, while Nse-Nifty is trading 21 points above the dotted line. However, BSE Midcap is trading down by 0.82%, while BSE Small cap index is trading 0.81% below Friday's closing. The rupee is trading at 45.52 to the US dollar.
According to economic think tank CMIE, India's economy is expected to grow by a strong 9.2% this year. The agency believes that the economy will perform better during the second half of the year led by the agriculture sector coupled with trade, transport, communications and hotel sectors. It expects the second half growth to be at levels of 9.7% as compared to the first half growth figure of 8.9%. The projections made by CMIE are similar to that the projections of the finance industry which expects the Indian economy to grow by about 9%. However, one needs to keep an eye on the real GDP growth rate considering that the inflation numbers have been way above comfortable levels in recent times.
In another development, CMIE also believed that corporate India will only be reporting a 7% YoY increase in profits this year. This would be due to slowdown in profit growth of the manufacturing sector, whose profits are expected to decline marginally by 2% YoY. During FY10, the profit growth figure stood at about 29% YoY.
Oil and gas stocks are currently trading mixed with IOC, Cairn India and Essar Oil leading the gains, while ONGC and GAIL are trading in the red. In order to increase production, ONGC will invest Rs 177 bn (nearly US $4 bn) in Gujarat in the next three to four years. The investments will be made to scale up the operations at the company's various assets and plants. The company will do a major revamp of its production and processing capacity, laying of pipelines and drilling, among others. About Rs 81 bn would cover 90 installations, 200 km of pipeline and 65 tanks. The MoU was signed during the two-day Vibrant Gujarat investment summit during which MoUs worth Rs 7.38 trillion were inked for Gujarat's energy sector.