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The Indian share markets finished the day on flat note with positive bias as it failed to hold on to the morning gains. At the closing bell, the BSE Sensex closed higher by 22 points, whereas the NSE Nifty finished higher by 19 points. The S&P BSE Midcap ended up by 0.5% while the S&P BSE Small Cap finished up by 0.6%. Sectoral indices finished the day on a mixed note with metal, capital good stocks leading the gains while, oil & gas, & IT stocks being the biggest losers.
Asian markets finished positive as of the most recent closing prices. The Nikkei 225 gained 0.4% and the Hang Seng rose 1.1%. The Shanghai Composite gained 0.14%. European markets are trading in the red. The FTSE 100 is flat, while France's CAC 40 is off 0.51%. Shares in Germany are flat with the DAX at 11,549.
Shares of Hindustan Zinc were in focus today as they hit a 52-week high. The state-owned miner's shares rose as much as 4% intraday to reach its record high of Rs 296.4.
The significant rise can be attributed to the fact that the government has sought dividend of up to US $2.2 billion from the company, as the government plans to target the boom in the base metal to shore up public finances.
Hindustan Zinc has achieved the highest ever mined metal production during the third quarter ended December 31, 2016, up 44% from previous quarter and 21% YoY.
The sequential increase was on account of higher volumes from Rampura Agucha open cast mine in accordance with mine plan and the YoY increase was driven by higher volumes from Rampura Agucha underground and open cast mines.
The production of integrated zinc metal during the quarter was at 205kt, up 38% from previous quarter, and flat y-o-y on account of accretion of mined metal inventory.
In line with the company's on-going expansion to reach 1.2 mtpa mined metal production capacity, environmental clearances were received for Sindesar Khurd expansion of ore production capacity from 3.75 mtpa to 4.5 mtpa and for Zawar mine to 4 mtpa.
Hindustan Zinc is the world's second biggest zinc producer and operates the world's third largest open-pit mine, and the world's largest zinc mine in Rajasthan.
A robust quarterly results meant that Hindustan Zinc remained a feather in the government's cap as regards public sector undertakings. However, the government is leaving no stone unturned in shoring up its finances by demanding a dividend of US $2.2 billion from the company.
As of today's close, Hindustan Zinc's stock had risen about 11.5% so far this year.
Moving on to news from the power sector. Avantha Group company Crompton Greaves (CG) has bagged a US $105 million order from PT PLN, the state-owned electricity company of Indonesia, to manufacture and install power transformers.
The order entails manufacturing and installation of transformers for more than 100 substations and power plants across Indonesia.
CG's power transformers will be installed across PT PLN's transmission network, spread over multiple substations and power plants in Java, Sumatra, Kalimantan, Sulawesi and the Papua islands of the Indonesian archipelago.
The scope of the project includes site survey, design, manufacture, transportation and installation of the transformers. This order also reinforces the existing strong relationship between CG and PT PLN.
The contract was secured through a highly competitive open book bid that involves passing through stringent quality checks.
The order falls under a project funded by PT PLN to enhance the performance of the Indonesian transmission grid, which is critical to PLN's 35 GW Fast Track Programme.
The transformers would be manufactured in Crompton Greaves' facility in Indonesia.
Shares of CG closed down 0.2%.
Most of the metal and mining stocks rallied strongly in the year 2016 on back of strong uptrend in commodities prices. So did the stock in news today, Hind Zinc. It touched life time high of Rs. 296.40.
The company deals majorly in Zinc. Its 70% business is affected by the Zinc prices. The remaining business is affected by lead prices and a small portion by silver prices. Last year, all the three commodities witnessed a robust rally. Zinc bottomed out in January 2016 and marked its strongest gains of over 100% before topping out in November 2016. Lead rallied more than 50% in the same period.
The stock's RSI has traded above 35 levels over the last year. This indicates immense strength in the counter.
Although the stock is affected by many factors, but strength in zinc and aluminum prices, is likely to keep bulls in the driving seat. On the flip side, bears could gain momentum only if the stock closes below Rs. 250.
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