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Power and IT stocks lead gains
Fri, 21 Jun 01:30 pm

Indian equity markets are trading in the positive territory during the post noon trading session. Barring stocks from the metal and FMCG sectors, all the sectoral indices are trading in the green. The most noticeable upward movement can be seen in the stocks of power and IT sectors.

BSE-Sensex is up by 24 points and NSE-Nifty is trading up by 6 points. While BSE Mid Cap is trading down by 0.28%, BSE Small Cap index is trading up by 0.33%. The rupee is trading at 59.27 to the US dollar.

Majority of the power stocks are trading in the green with Nevyeli Lignite and Tata Power being the major gainers. As per a leading financial daily, Tata Power has completed commissioning of 1 MW geothermal pilot plant in Australia in partnership with Geodynamics. Geothermal energy harnesses the natural heat found under the earth's surface to generate electricity. In geothermal systems technology, heat is extracted from granites located at a depth of over 4,000 metres by circulating water through them. The heated water returns to the surface under pressure and is converted into electricity through a heat exchanger and conventional geothermal power plant. Apart from this project, Tata Power is also implementing a 250 MW geothermal project in Indonesia in collaboration with Origin Energy and PT Supraco. The company has a target of generating 20-25% of power from clean energy sources.

Energy stocks are trading mixed with Chennai Petroleum and Essar Oil leading among gainers, while Indian Oil Corporation (IOC) and Petronet LNG are among the losers. As per a financial daily, the oil marketing companies are expected to witness huge rise of approximately 50% in the under recoveries in FY14. This is due to constant depreciation in the rupee. Reportedly, a one rupee movement had resulted in a rise in the under recoveries by around Rs 90 bn for oil companies in the last month. Companies like Hindustan Petroleum Corporation Ltd (HPCL), Bharat Petroleum Corporation Ltd. (BPCL) and IOC's losses are expected to widen by 50% in FY14. These oil firms import around 70% of their oil requirement for which the payment is done in dollar denomination. Further, with the possibility that the rupee could depreciate further, this has added to the worries of oil companies who are already bearing the brunt of mounting losses.

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