The Indian markets have started today's session on a positive note. The benchmark indices opened at the breakeven mark but soon moved into the green. They have managed to remain in the positive territory since then. Other key Asian markets are in the green with Taiwan (up 0.6%) leading the pack of gainers. The US markets closed lower by 0.4% yesterday.
Currently in India, heavyweights from the BSE-Sensex are trading strong with metal and banking majors finding investors' favour. The BSE-Sensex is trading higher by around 85 points, while the NSE-Nifty is up by about 25 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 0.6% and 0.7% respectively. The rupee is trading at 47.14 to the US dollar.
Power stocks have opened the day on a positive note. Gainers here include Gujarat Industrial Power and Reliance Power. As per a leading business daily, the government will kick-start the bidding process this week for the 4,000 mega-watt (MW) ultra mega power project (UMPP) in Orissa. PFC, which is the nodal agency for UMPPs, will handle the bid process. It may be noted that the Chhattisgarh UMPP has suffered setbacks due to the uncertainty over allocation of captive coal blocks. However, the captive coal mines attached with Orissa project have got all the clearances and there are no environmental and forest related issues. In fact, the project is likely to be finally awarded by November this year. The project will be located near Ib Valley in Western Orissa and will require an investment of Rs 200 bn.
The power ministry plans to set up nine UMPPs, with four projects at pithead and five in coastal locations. This will help meet the incremental electricity generation target of 100,000 MW by FY17. Reliance Power has bagged three UMPPS while Tata Power has bagged one. Bids are yet to be invited for the remaining projects.
Engineering stocks have opened the day on a positive note. Gainers here include Engineers India and Cummins India. As per a leading business daily, BHEL plans to tie up with a US firm for obtaining the technology for manufacturing oil rigs for customers like ONGC. BHEL is currently engaged in the on-shore oil rigs business and plans to expand it further. The company has so far manufactured and supplied over 80 drilling and well-servicing rigs to ONGC and Oil India. It may be noted that offshore rigs require more sophisticated technology that on shore ones. Given that most new discoveries are now found off shore, the demand for such rigs is higher than supply leading to extremely high rentals. In our view, a domestic manufacturing of offshore rigs is a welcome development for the entire Indian upstream energy sector.