The Indian stock market
extended gains over the last two hours of trade due to sustained buying interests in heavyweights. All sectoral indices are trading in the green. Stocks from the banking, metal, capital goods, power and realty space are leading the pack of gainers.
is trading up by 222 points while NSE-Nifty
is trading 70 points above yesterday's closing. The BSE Mid Cap and BSE Small Cap indices are trading up by 1.4% and 1.6% respectively. The rupee is trading at 46.01 to the US dollar.
Power stocks have been trading firm with Jaiprakash Power, Tata Power, Torrent Power and Coal India leading the pack of gainers. However, Gujarat Industries Power is trading in the red. As per a leading financial daily, Tata Power's flagship Ultra Mega Power Project (UMPP) at Mundra in Gujarat's Kutch district may face adverse impact of higher imported coal costs after the change in mining laws by the Indonesian government. However, part of the costs will be compensated by higher coal realisations, due to its stake in Indonesian coal mines. The industry reports suggest that the Gujarat government, which had signed to buy about 2,000 MW from there, is not inclined to pay the higher costs. The company is speaking to the Union government for a rate increase as well as planning other measures to mitigate the impact. The project is expected to be fully commissioned by 2012-13. It was awarded to Tata Power through competitive bidding, on a rate of Rs 2.26 per unit. In the original coal supply contract, Mundra UMPP was to get 75% of the coal at index-linked prices, and the rest 25% was to be supplied at a lower price (about $40 per tonne), fixed for five years. After five years, the entire quantity would come at market prices. However, with the change in mining policy, the fuel costs are expected to rise by about $30-40 per tonne and hence, the project is estimated to incur losses if the company is unable to pass on the higher costs.
Steel stocks have been trading firm as well with Tayo Rolls, Steel Authority of India Ltd (SAIL), Tata Sponge and Metals and Minerals Trading Corporation of India Ltd. (MMTC) leading the pack of gainers. However, Gujarat Mineral Development Corporation is trading weak. As per a leading financial daily, a consortium of Indian steel and mining firms led by SAIL has bid for mining concession of four blocks at Hajigak Iron Ore Mines in Afghanistan. The firm has proposed to set up a steel plant in the country. The blocks are estimated to have reserve of around 1.8 billion tonne of high-quality magnetite with 62-63% iron content. The Indian consortium faces competition with five other global bidders. The name of the preferred and reserved winners will be announced next month. The expected date for the same is October 4.