The major Asian stock markets have opened the day on a strong note with Hong Kong (up 1.4%) and Indonesia (up 1.2%) leading the pack of gainers. The Indian share market indices have also opened the day on a positive note. All sectoral indices have opened in the green with the stocks in the banking and realty space leading the gains.
The Sensex today is up by around 293 points (1.4%), while the NSE-Nifty is up by around 86 point (1.4%). Mid and small cap stocks are also trading in the green with the BSE Mid Cap and BSE Small Cap indices up by around 0.9% and 0.7% respectively. The rupee is currently trading at Rs 62.83 to the US dollar.
Power stocks have opened the day on a firm note with KSK Energy and Jai Prakash Power leading the gains. Tata Power Company Ltd has announced results for the second quarter of the financial year 2013-14 (2QFY14). The consolidated revenues for the quarter witnessed a growth of 14% year on year (YoY). The growth was driven by operations across the units of Mundra and Maithon. The sales volumes for the quarter stood at 3,762 million units (MU) and overall generation stood at 3,404 MU. As per the management, all of the company's projects and subsidiaries have performed well. The consolidated profit from operations increased by 39% YoY during the quarter. This was despite the high cost of imported coal and populist tariff regimes. On a consolidated basis, the company reported a net profit of around Rs 750 m during the quarter, as compared to a loss of around Rs 838 m in the corresponding quarter last year. The loss in 2QFY13 was mainly due to a one off additional impairment charge of 2.5 bn rupees due a change in the long-term foreign currency outlook at its main plant. While the company has swung back to profits, the management has said that higher forex losses continue to keep margins under pressure.
Indian Pharma stocks have also opened the day on a mixed note with Elder Pharma and Panacea Biotech Ltd leading the gains. However, Natco Pharma and Strides Arcolab were facing selling pressure. As per a leading financial daily, as more and more multinationals are eyeing Indian pharma firms for acquisition, the Department of Industrial Policy and Promotion (DIPP) has proposed steps in a draft cabinet note that aim to tighten the Foreign Direct Investment in the domestic pharmaceutical companies. As per the proposal, the foreign company will not be allowed to close down the existing Research & Development (R&D) centre. Further, it will have to mandatorily invest upto 25 % of the FDI in the new unit or R & D facility. The total investment as per the conditions proposed will have to be incurred within three years of acquisition. The note also proposes to slash FDI cap to 49% in rare or critical pharma verticals. Currently, India allows 100 % FDI in pharmaceutical sector through automatic approval route in the new projects. However, the foreign investment in the existing pharmaceutical companies is allowed only through Foreign Investment Promotion Board's (FIPB) approval.