Indian stock markets shed some early morning gains but were still trading in the green during last two hours of trade. Barring a few oil & gas and consumer durable stocks, all sectoral indices were trading in the positive.
The BSE-Sensex is trading up by 117 points and NSE-Nifty is trading strong by 71 points. BSE Mid cap and BSE Small cap indices are trading strong by 1.1% and 1.4% respectively. The rupee is trading at 51.07 to the US dollar.
Cement stocks are trading strong led by India Cements and Ambuja Cement. As per a leading daily, cement prices may go up by Rs 9 per 50 kg this month. This is due to the new coal pricing mechanism of Coal India which will raise the cost of producing cement. Coal India has started pricing coal on the basis of gross calorific value obtained from the energy produced by burning coal. Prior to this, coal was priced on the basis of moisture and ash content in it. Cement companies are likely to pass on this hike in coal prices to the consumers and may raise cement prices by 2-3%. Growth in construction pace will increase the demand for cement, thereby aiding the hike in prices. However, it may be noted here that cement prices were down in December by 1% despite strong growth in demand.
Energy stocks are trading strong led by Indraprastha Gas and Cairn India. According to a leading financial daily, GAIL India is planning to buy liquefied natural gas (LNG) from suppliers, including Macquarie Energy, which has a share in the US-based Freeport LNG project. However the company has yet not decided on the volumes to be purchased from Macquarie, but according to industry sources, GAIL would soon sign a deal with Macquarie to annually buy 2 m tonnes of LNG for 20 years. GAIL, which is primarily a gas transmission firm, is gradually stepping up its gas portfolio to emerge as a major player in the local market, where output lags demand.