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Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
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Markets cheer FDI reforms 
(Wed, 17 Jul 09:30 am) 
 
The major Asian stock markets have opened the day on a mixed note with South Korea (up 0.9%) and Indonesia (up 0.7%) leading the gains. However, markets in China (down 0.4%) and Japan (down 0.6%) are trading weak. The Indian equity markets indices have opened the day on a firm note. Barring banking, all sectoral indices have opened in the green with stocks in the capital goods and power space leading the gains.

The Sensex today is up by around 80 points (0.4%), while the NSE-Nifty is up by around 18 points (0.3%). Mid and small cap stocks have also opened in the green with the BSE Mid Cap and BSE Small Cap indices up by around 0.4% each. The rupee is trading at Rs 59.21 to the US dollar.

In order to boost investor sentiments in a tough economic environment, the Government has raised the FDI (Foreign Direct Investment) ceiling in 12 sectors. This includes telecom and defence sectors. In the financial sector, the FDI limit has been raised for asset reconstruction companies and credit information bureaus .The cap is also likely to be raised in insurance and pension to 49%. However, the move will be conditional to parliamentary approval. For several other sectors such as oil and gas refining and stock exchanges, the government has decided to allow FDI without prior approval. The Government has deferred a decision on raising limit in civil aviation from 49% to 74% on account of security concerns in ground handling and customs.

Energy stocks have opened the day on a mixed note with Castrol Ltd and Indraprastha Gas Ltd leading the gains. However, Chennai Petroleum Corporation Ltd and Petronet LNG are leading the losses. As per a leading financial daily, Mr. B.K Chaturvedi, a member of Planning Commission has stated that the government could consider asking state-owned upstream explorers such as Oil and Natural Gas Corp. Ltd (ONGC) and Oil India Ltd (OIL) for a subsidy mechanism. The mechanism would ease the impact of the hike in the price of natural gas on power and fertilizer companies. He suggested that the move to raise gas prices will certainly have an impact on power and fertilizer segments. He said that a lot of gas is produced by ONGC, OIL and others. So, there is a chance the government may turn to them.

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