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Metal Stocks Lead the Gains
Thu, 3 Mar 01:30 pm

After opening firm, the Indian indices gained momentum and registered further gains in the post-noon trading session. Sectoral indices are trading on a positive note with stocks from the metal, IT and capital goods sectors leading the gains.

The BSE Sensex is trading up 329 points (up 1.4%) and the NSE Nifty is trading up 96 points (up 1.3%). The BSE Mid Cap index is trading up 0.2% while the BSE Small Cap index is trading up by 1%. Gold prices, per 10 grams, are trading at Rs 29,277 levels. Silver price, per kilogram is trading at Rs 35,823 levels. Crude oil is trading at Rs 2,345 per barrel. The rupee is trading at 67.30 to the US$.

As per a leading financial daily, the trade deficit between India and China increased to US$ 44.7 billion during April-January period of this fiscal.

India's exports to China stood at US$ 7.56 billion during the aforesaid period. Further, imports jumped to US$ 52.26 billion in April-January.

In 2014-15, the deficit was aggregated at US$ 48.48 billion.

The Commerce and Industry Minister Nirmala Sitharaman has said that against this backdrop and in the spirit of mutual benefit, India and China shall endeavour to strengthen cooperation and gradually achieve bilateral trade balance over the next five years.

It shall be noted that both the countries had signed a five-year development programme for Economic and Trade Cooperation in September 2014. The programme has laid down a medium-term roadmap for promoting balanced and sustainable development of economic and trade relations. The minister added that the programme recognises that the trade deficit with China is a matter of high concern for India.

It has been witnessed that while India's imports from China have been growing steadily, our exports to the dragon nation have not grown at the same rate. And this has led to a current account deficit. Further, the steep depreciation in the rupee has been one of the adverse impacts of the wide trade deficit. The situation has become a major concern for the Indian government. We believe, that some serious steps should be initiated to correct the above trade imbalance. If not, it will pose a threat to the long term well-being of the Indian economy.

Steel stocks are trading in the green with Tata Sponge and Jindal Steel witnessing maximum buying interest. Tata Steel has received clearance from Environment Ministry for its Rs 18 billion expansion project to be carried out at Jamshedpur Steel Works in Jharkhand.

The development comes as the ministry has considered the application based on the recommendations of the Expert Appraisal Committee (Industry-I) and decided to grant environment clearance (EC) to the proposal for expansion of crude steel production at Tata Steel Works. The environment clearance has been given to the company subject to strict compliance with specific and general conditions.

According to the proposal, the company will expand crude steel production from 9.7 million tonnes per annum (MTPA) to 11 MTPA at Jamshedpur Steel Works.

The above clearance will lead to an increase in the company's production levels and aid its profitability.

Apart from this, Tata Steel is said to benefit from the 15% investment allowance, declared in the Budget, which comes into effect retrospectively from April 1, 2015. The Union Budget stated that companies can avail the allowance so long as the assets are installed on or before March 31, 2017, irrespective of their acquisition date. Tata Steel will benefit from this as it has invested Rs 250 billion in new steel-making capacity in Kalinganagar, Odisha. The plant has a capacity of six million tonnes and three million tonnes will be rolled out from 2016-17.

Tata Steel is the first integrated steel plant in Asia and is now the world's second most geographically diversified steel producer and a Fortune 500 Company. Presently its stock is trading up by nearly 5.9%.

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