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Mid, smallcaps in the limelight
Wed, 15 Jun 11:30 am

Indian stock market continue to trade in the red on sell off in heavy weights over the last two hours of trade. Stocks from the consumer durables and realty space are trading weak while stocks from the FMCG and pharma space are trading firm.

The BSE-Sensex is trading down by 34 points while NSE-Nifty is trading 11 points below the dotted line. BSE Midcap and BSE Small cap indices are both up by 0.2%. The rupee is trading at 44.67 to the US dollar.

Automobiles stocks are trading weak led by Escorts and Maruti Suzuki. As per a leading financial daily, Bajaj Auto is considering competition beyond Hero Honda in India. The auto company has instead decided to compete against Honda and other Japanese motorcycle makers in the sports bike segment. The company's management is very open about its potential serious rival. In its new advertisement of its motorbike Pulsar, Bajaj has stated that Pulsar sells 5 times more than any Japanese sports bike in India. In the meanwhile, Honda is planning to launch a range of motorcycles in India through its subsidiary Honda Motorcycle and Scooter India (HMSI). It may be recollected that Honda had split with its Indian partner Hero this year.

Power stocks are trading mixed with CESC Ltd and Reliance Infra trading firm while Power Grid Corporation and Reliance Power are trading weak. As per a leading financial daily, NTPC plans to set up a power exchange. For this purpose NTPC has formed a joint venture company National Power Exchange Ltd (NPEX) along with NHPC, Power Finance Corporation (PFC) and Tata Consultancy Services (TCS). It may be noted that there already are two other power exchanges operating in the market. Total power purchased from the exchange accounts for 4% of the total consumption. However, officials from NTPC believe that the power trading market has a strong growth potential.

The two existing power exchanges have already launched weekly products for trading on a week-ahead basis on the exchange platform. In fact they have proven to be very important market mechanisms. This is because the exchange prices have become important benchmarks for the entire power trading market. Since the two exchanges started operations, the power price has come down from Rs 16-20 per unit to Rs 2.5/3 per unit. NPEX has already received in-principle approval from the Central Electricity Regulatory Commission (CERC). But the implementation time will depended on terms of CERC approval and other factors.

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