After opening in the red, the Indian stock markets have made a sharp recovery on the back buying interest in heavy weights over the last two hours of trade. Stocks from the auto and IT space are the largest gainers while stocks from the metals and pharma space have gained the least.
The BSE-Sensex is up by 213 points while NSE-Nifty is trading 56 points above the dotted line. BSE Midcap index is up by 0.9% while BSE Small cap index is trading 1.3% below Monday's closing. The rupee is trading at 44.45 to the US dollar.
Steel companies are trading firm led by Bhushan Steel and Ispat Industries. As per a leading financial daily, Steel Authority of India Ltd (SAIL) has finally obtained environmental clearance for the McLellan Iron Ore Mining Project. McLellan is part of the Chiria group of mines. These mines were a legacy of IISCO and had merged with SAIL in April 2005. However, since then this group of mines has remained largely untapped. With reserves of over 2 bn tonnes, these mines are considered the largest single hill iron deposit in Asia. McLellan mine is considered to have the largest reserve at 1.1 bn tones.
According to SAIL the capital cost of the project is Rs 12.4 bn while the environmental protection cost is estimated at Rs 413 m. The annual recurring expenditure for environment protection stands at Rs 49.1 m. The Union Ministry of Environment and Forests had issued the clearance of this project based on a revised proposal by SAIL for an open cast mechanized iron ore mine. The target capacity would be 4.2 m tonnes a year as per the revised proposal. It may be noted that this project is crucial for SAIL's long-term raw material security as the reserves are expected to last at least 150 years.
Hotel stocks are trading mixed with Taj GVK and Hotel Leelaventure leading the gains. However, Country Club and Oriental Hotels are on the losing end. As per a leading financial daily, EIH is looking to expand in Europe as well as in India. The Oberoi group company operates luxury hotels under the brands Oberoi and Trident. It has recently opened a new five-star at Gurgaon. The new 202-room luxury hotel is under a management contract with Orbit Resorts. In future, EIH plans to open hotels through management contracts as well as through a mix of equity investments. It is expected to open a hotel each in Hyderabad and Dubai in the next year. In 2013, another hotel is expected in Hyderabad followed by a resort in Morocco in 2014. The hotel company plans to open a hotel in Oman as well. It may be recollected that EIH has just raised Rs 11.78 bn through a rights issue. The company intends to use this for mainly retiring debt and for expanding flight kitchen business.