The Sensex today is trading higher by about 20 points (up 0.1%) while the NSE-Nifty is trading flat. Midcap and smallcap stocks are trading in the natural zone as the BSE Mid Cap and BSE Small Cap indices are trading flat as well. The rupee is trading at 55.17 to the US dollar.
Mining stocks are currently trading firm led by Coal India, Sesa Goa and Ashapura Minechem. As per a leading daily, Coal India (CIL) has initiated the process of forming a wholly-owned subsidiary in South-Africa to help it tide shortage in domestic coal production. The company has invited bids for appointment of consultants that would assist it in the formation of subsidiary in the country. Reportedly, the company has earmarked funds of Rs 60 bn to acquire overseas mines. CIL is the largest coal producer in India accounting for more than 80% of domestic coal output. While the demand shortfall of coal was around 161.5 m tonnes in FY12, CIL produced 11.2 m tonnes lesser coal than its targeted production for the year. CIL will be signing fuel supply agreements to supply a minimum of 80% of the fuel requirements of power utility providers failing which the company will have to pay a penalty. Therefore the company wants to improve coal availability by scaling up production and sourcing it from overseas markets.
Stocks forming part of the BSE-Power index are currently trading weak led by Alstom T&D, Siemens and PTC India. Power Finance Corporation announced its results for the quarter ended June 2012 recently. The company reported an increase in net interest income of 43% YoY during 1QFY13. This was on the back of a 29% growth in advances. PFC's net interest margin improved to 4.2% in 1QFY13 from 3.9% in 1QFY12. The company's profit level was higher by 42% YoY in 1QFY13 on account of higher net interest income growth coupled with a marginal increase in other expenses. At the end of the quarter, the company's capital adequacy ratio (CAR) stood at a comfortable rate of 18.55%.