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Barring China, major Asian stock markets have opened the day on a positive note with stock markets in Japan and Singapore are trading higher by 0.4% and 0.5% respectively. Benchmark indices in Europe ended their previous session in red. Whereas, benchmark indices in US ended their previous session on a positive note. The rupee is trading at 67.25 per US$.
Indian stock markets have opened the day on a firm note. The BSE Sensex is trading higher by 116 points (up 0.4%) and NSE Nifty is trading higher by 32 points (up 0.4%). Both, BSE Mid Cap and BSE Small Cap are trading higher by 0.6% and 0.4% respectively.
Indian Meteorological Department (IMD) has recently given second forecast, stating above normal rains. Reportedly, the odds are overwhelmingly favouring an above normal monsoon-106% of the long period average (LPA).
Further, monsoon is expected to be well-distributed across the country, with IMD projecting 108% rainfall in the northwest region and 113% in central and peninsular India.
The monsoon is considered normal when the rainfall is 96-104% of the LPA and is considered above normal when it is 105-110% of the LPA.
The news comes as a relief considering that the country has faced a deficit rainfall in the preceding two years. Eleven states declared a drought in the country after last year's failed rains which have also led to depleting water levels in reservoirs.
A normal monsoon will lead to higher disposable income in the hands of farmers, which in-turn will boost the rural consumption. To add to this, a normal monsoon will also help to keep the inflation at low levels. The possibility of a good monsoon would also increase the chances of the country's central bank retaining its easy money policy. However, there have been many instances in the past wherein the forecasts have gone wrong. Provided, they are accurate it will help to revive the rural sentiments.
In another news update, Oil and Natural Gas Corporation of India (ONGC) has decided to invest Rs 40 billion in four coal based methane (CBM) gas blocks. Methane is a form of natural gas extracted from coal beds.
Till date, the company has invested around Rs 5.1 billion to develop the CBM gas blocks. Two of the four blocks is expected to start production by the second half of fiscal year 2018. Further, the company has proposed to sell this gas at the market discovered price as provided in the CBM contract.
Reportedly, GEECL's Raniganj (South) and Essar Oil's Raniganj (East) are the only two blocks under production. Reliance Industries will begin CBM production in the April-June quarter of this fiscal year. The stock is trading up by 0.2%.
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