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Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
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Markets begin on a positive note 
(Thu, 20 May 09:30 am) 
 
The Indian markets have started today's session on a positive note. The benchmark indices have managed to hold on to their gains since the initial trades. Other key Asian markets are in the red with Indonesia (down 0.9%) leading the pack of losers. The US markets closed lower by 0.6% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading strong with auto and metal majors attracting investors' favour. The BSE-Sensex is trading higher by around 105 points, while the NSE-Nifty is up by about 30 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 1% and 1.2% respectively. The rupee is trading at 46.35 to the US dollar.

Energy stocks have opened the day on a positive note. Gainers here include ONGC and Gail. As per a leading business daily, the government has raised the price of administered price mechanism (APM) gas to US$ 4.2 per m British thermal unit (mBtu). This is at par with the price of Reliance Industries' KG-D6 gas. APM gas is produced by ONGC and OIL from the blocks nominated to them by the government. It has been a long standing demand of ONGC that its gas prices be revised upwards as the company was incurring losses at the existing price of about US$ 1.8 per mBtu. The higher prices will help the upstream giant recoup its losses.

It may be noted that there is no uniform price of natural gas in India. It varies widely depending on the source of supply, with APM gas being the cheapest. Higher APM gas prices will lead to higher CNG prices by almost 20-35% depending on the city. It will also affect power and fertiliser companies to the extent they are unable to pass on the cost to the customer. Interestingly, both Reliance Industries and ONGC feel that even US$ 4.2 per mBtu is an unviable price for producing gas from new and smaller gas fields in the KG basin. Hence, it won't come as a surprise if the government revises prices further upwards in the future.

Telecom stocks have opened the day on a positive note. Gainers here include Idea Cellular and Reliance Communications (RCom). RCom declared its FY10 results recently. The company reported a marginal 0.3% YoY decline in revenues during the year. While the company's wireless business saw its sales decline by 4% YoY, sales of its other two segments i.e., global and broadband increased by 23% YoY and 13% YoY during FY10. On a quarter on quarter basis, average revenues per user, average minutes of usage and average revenue per minute were lower by 7%, 4% and 2% respectively during 4QFY10. The company's operating margins contracted by 4% YoY to 30.8% during FY10 on the back of higher other expenditure, i.e. network operations, sales and administration expenses. At the bottomline level, the company posted a decline of 23% YoY for the full year.

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