Indian stock markets open firm

Thu, 29 Aug 09:30 am

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   11:30 am   

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Barring China (down 0.3%), the major Asian stock markets have opened on a firm note with stock markets in South Korea (up 1.4%) and Taiwan (up 1.2%) leading the gains. The Indian stock market indices have opened the day on a positive note as well. Barring software, all sectoral indices have opened in the green with the stocks in capital goods and oil and gas space leading the gains.

The Sensex today is up by around 120 points (0.7%), while the NSE-Nifty is up by around 31 points (0.6%). 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 0.7% each. The rupee is trading at Rs 67.27 to the US dollar.

Energy stocks have opened the day on mainly in the green with Jindal Drill Ltd and Essar Oil Ltd leading the gains. As per a leading financial daily, the state run Indian oil companies are likely to lose money on the sale of petrol on account of rising prices and falling rupee. It is important to note here that petrol is a fully decontrolled fuel. As per the financial daily, if oil companies are not allowed to raise petrol rates by Rs 5 per litre by first fortnight of September 2013, they are likely to suffer under recoveries for the first time in this financial year. As per the industry estimates, the average under recovery on petrol currently stands at around Rs 1.9 per litre. The under recoveries on other fuels like diesel, kerosene and LPG stood at Rs 10.22 a litre, Rs 33.54 a litre and Rs 412 a cylinder, respectively for the second fortnight of the current month. However, the Government is unlikely to go for a major hike in fuel prices before Parliament's monsoon session gets over.

Mining stocks have opened the day on a mixed note with MMTC Ltd and NMDC Ltd leading the gains. However, Coal India Ltd and Sesa Goa Ltd were facing selling pressure. As per a leading financial daily, 44 domestic power firms' overall dues to Coal India Ltd (CIL) currently amount to around Rs 110 bn. As on 30th June, 2013, the dues of National Thermal Power Corporation (NTPC) alone accounted for around Rs 41 bn. Earlier in April, NTPC had refused any such liability saying that it had already paid for the quality it had received. The disagreement was on account of a shift in the coal grading and pricing methodology from the useful heat value to the gross calorific value system. The power ministry has written a letter to coal ministry that suggested appointment of a third-party to monitor sample testing at loading and unloading points. This was in response to several representations from power companies over grade slippages due to an improper sampling procedure adopted by coal companies. The overall dues to CIL the dues have gone up by 21% since April 2013. It is important to note here that this amount is enough to produce around 50% of the country's annual imports.