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The major Asian stock markets have opened the day on an mixed note with stock markets in China (up 2.6%) and Japan (up 1%) being the top gainers. However stock markets in Korea and Indonesia are trading down by 0.3% and 0.2% respectively. Major stock indices in Europe ended their previous session in green. However stock markets in US closed marginally down by 0.05%. The rupee is trading at 65.66 per US dollar.
Indian stock markets have opened the day on a negative note. BSE-Sensex is trading lower by 97 points (down 0.4%) and NSE-Nifty is trading lower by 30 points (down 0.4%). Both S&P BSE Midcap and S&P BSE Smallcap is trading lower by 0.2%. Barring stocks from FMCG sector, major sectoral indices witnessed a weak beginning today. Stocks from telecommunication and pharmaceutical sector are the top losers.
Power Grid Corporation of India reported its results for the quarter ended September 2015. The revenues of the company grew by 18% on a YoY basis. Both the operating and net profits grew by 21% YoY for the quarter.
There was a considerable slowdown in the project commissioning during the current quarter. Reportedly, company commissioned projects worth Rs 51 bn during the quarter, registering a growth of just 8.5% YoY in this segment.
A big project worth Rs 75 bn was set to be commissioned in the second quarter, got delayed and was recently commissioned. Capitalization of the asset will contribute to the company's earnings from this quarter. The assets capitalized in this fiscal year amounts to Rs 171 bn and is expected to reach Rs 220-260 bn by the end of the fiscal year.
Finance Minister, Mr Jaitley stated that the government is likely to announce major policy decisions in order to revive the power sector in next few days.
According to Mr Jaitley, the entire chain from generators to grid operators is getting affected due to the poor financial health of the State Electricity Board (SEB). The bad shape of SEBs has constrained them from signing long term Power Purchase Agreement (PPA) with the power generators. Consequently, this has led to a situation wherein inspite of adequate electricity supply there are no takers for the same.
Therefore in order to resolve the demand issue cabinet is planning to consider recasting of loans worth Rs 4300 bn loans of nine power distribution companies. This will immensely benefit the distribution companies. Provided reforms are implemented productively, there will be more signing of PPA in the coming months which will boost the entire sector as a whole.
Recently, Tanushree Banerjee, Managing editor of The Indian Letter, has discussed about the reasons behind the dismal state of the SEBs and the steps that should be taken to revive the distribution sector. Read on to know more about Tanushree's views on this aspect.
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