Indian stock markets open firm

Wed, 21 Aug 09:30 am

   Previous Close   

   Pre-Open   

   11:30 am   

   01:30 pm   

   Closing   

The major Asian stock markets have opened on a mixed note with stock markets in Indonesia (up 1.2%) and China (up 0.1%) leading the gains. However, the stock markets in Hong Kong (down 1.1%) and Japan (down 0.8%) are leading the losses. The Indian stock market indices have opened the day on a firm note. Barring software, all sectoral indices have opened in the green with the stocks in capital goods and banking space leading the gains.

The Sensex today is up by around 229 points (1.3%), while the NSE-Nifty is up by around 81 points (1.5%). Midcap and small cap stocks have opened in the green as well with the BSE Mid Cap and BSE Small Cap indices up by around 1.6% and 0.9% respectively. The rupee is trading at Rs 63.27 to the US dollar.

Telecom stocks have opened the day on a mixed note with Mahanagar Telephone Nigam Ltd (MTNL) and ITI Ltd leading the gains in the sector. However, ADC India Communications Ltd and AGC Networks have opened in the red. As per a leading financial daily, the major telecom companies in India are likely to suffer on account of depreciating rupee as their dollar debt could have swelled up by Rs 73 bn- Rs 75 bn from their value at the end of June 2013. This is because Indian rupee has depreciated by around 7% against the dollar since the beginning of July 2013. Besides, the increase in the cost of paying overseas vendors for services is also likely to drag the profitability of telecom companies. It must be noted here that companies like Bharti Airtel, Reliance Communications and Idea Cellular Ltd have significant overseas debt on their balance sheets which was taken to meet capital expenditure needs, to buy 3G spectrum and acquisitions.

Engineering stocks have opened the day on a mainly in the green with Everest Kanto Cylinder Ltd and Larsen & Toubro (L&T) leading the gains in the sector. As per a leading financial daily, L&T has won an order valued around Rs 15 bn (US$250 m) from Petroleum Development Oman LLC (PDO). It is important to note here that PDO is a leading exploration and production company in the Sultanate of Oman. It accounts for 70 % of the country's crude oil production and is the sole supplier of natural gas. The engineering, procurement and construction (EPC) order is for the Yibal 3rd stage depletion compression (Y3DC) project at the Yibal-Natih gas reservoir in Oman. Its recoverable reserves are estimated at 90%. It has been in production since 1972 and has undergone a series of expansions to cater to increasing gas demand. Yibal 3rd stage facility will be installed to boost reservoir pressure. The project is likely to be completed in 39 months.