Indices stay close to dotted line

Thu, 15 Sep 01:30 pm

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   09:30 am   

   11:30 am   

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Despite buying interests in select heavyweights, the Indian indices continue to languish close to the dotted line. Stocks from the realty, software and consumer durables space are leading the pack of gainers while those from capital goods, FMCG and metal space are trading weak.

The BSE-Sensex and NSE-Nifty are trading flat. The BSE Mid Cap and BSE Small Cap indices are trading up by 0.2% and 0.1% respectively. The rupee is trading at 47.73 to the US dollar.

Telecome stocks have been trading mixed with Reliance Communications, ITI Ltd and Himachal Futuristic leading the pack of gainers. However, ADC India Communications, AGC Networks and Idea Cellular are trading in the red. As per a leading financial daily, according to the draft telecom policy 2011, it is proposed to have new framework for the telecom sector. In the new framework, there is a proposal of abolishing roaming chargers within India by introduction of a 'one nation-one license' regime for mobile phone companies. The concept of domestic roaming is absent in most of the countries even in the big countries like the US. In India, the country is divided into 22 telecom circles. Hence, customers need to pay if they use their mobile phones in other circles. There is also a proposal to expand mobile number portability facility which would allow consumers to retain their numbers without any domestic circle restrictions. As a result, consumers can retain their numbers when they change their service operators as well as circles.

This proposal is definitely good for Indian mobile phone users. However it would impact the revenues of the telecom companies. Hence, the proposal is going to be objected by telecom companies. At present, the telecom companies generate Rs 130-140 bn or around 10% of total revenues from roaming services.

Power stocks have been trading mixed as well with Gujarat Industries Power, Jaiprakash Power and CESC Ltd leading the pack of gainers. However, Reliance Infrastructure, GVK Power and PTC India Ltd are trading weak. As per a leading financial daily, due to lack of logistical infrastructure, Coal India communicated to NTPC that it will not be able to import fuels and get delivered at the doorsteps of various power plants of NTPC. As a result, NTPC Ltd, the largest Indian Power producer, has cancelled a deal with Coal India Ltd to import fuel to feed its various power plants. As per a coal India official, the company is not in a position to provide end-to-end services. Earlier Coal India tried to rope in Indian Railways for the logistics. It also attempted to make a joint venture with the Shipping Corporation of India for imports. But nothing worked for the company. Now NTPC is again planning to invite bids to import fuels.