The Indian markets have started today's session on an extremely positive note. The benchmark indices opened above the breakeven mark and have moved higher into the positive territory since then. Other key Asian markets are trading in the green with Indonesia (up 2.1%) leading the pack of gainers. The US markets closed higher by 0.4% yesterday.
Currently in India, heavyweights from the BSE-Sensex are trading strong with construction and software stocks attracting investors' interest. The BSE-Sensex is trading higher by around 120 points, while the NSE-Nifty is up by about 35 points. Buying interest is also being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.7% each. The rupee is trading at 45.43 to the US dollar.
Aluminium stocks have opened the day on a positive note. Gainers here include Hindalco and Nalco. As per a leading business daily, India's largest aluminium maker Hindalco has received loan approvals of over Rs 100 bn from more than 10 banks. The debt will have a tenure of 10 years at an interest rate of 11.25%, slightly lower than SBI's prime lending rate of 11.75%. The company plans to raise a debt of Rs 49 bn for its Utkal alumina refinery project in Orissa. Since the approval is more than the amount required by Hindalco, it is likely to be proportionately shared by the banks. It may be noted that Hindalco is going through a major expansion program. It plans to invest over Rs 230 bn in the next three years, including other new plants in Orissa, Madhya Pradesh and Jharkhand.
Energy stocks have opened the day on a positive note. Gainers here include Gujarat Gas and Castrol. As per a leading business daily, Reliance Industries has lost out in the race to acquire a stake in Canada's Value Creation. It was interested in buying a stake for US$ 2 bn in Value Creation's Terre de Grace oil sands block. However, UK based giant BP bagged the deal. It may be noted that Reliance Industries has been on the look out for assets overseas but has not been successful in its recent attempts, including for the bankrupt petrochemical major LyondellBasell. The value of most of the target assets have gone up with the revival in the global economy. In our opinion, the desire to achieve greater economies of scale must be tempered with reasonable valuations. At a time when the valuations of the target assets are moving beyond its reach, it makes sense for Reliance Industries to step back.