Indian indices continued to gain momentum during the previous two hours of trade as buying intensified in the index heavyweights. Currently, stocks from the oil & gas, banking and IT sectors are seeing the maximum gains.
Currently, the BSE-Sensex is trading up by around 248 points, while the NSE-Nifty is up by about 66 points. However, buying interest amongst the mid and small cap stocks is muted with both the BSE-Midcap and BSE-Smallcap indices trading lower by 0.2%. The rupee is trading at 45.75 to the US dollar.
Oil & gas stocks are trading strong with Cairn India and Indraprastha Gas being the biggest gainers. However, Petronet LNG and Essar Oil are trading weak. Cash-rich ONGC and Oil India have joined hands separately with BPCL and IOC for a foray into city gas distribution (CGD). Though ONGC and OIL are major producers of natural gas, they currently have no presence in its retailing and marketing, a field dominated by GAIL and its joint ventures. ONGC owns and operates 22,000 km of pipelines in India, including nearly 4,500 kilometres under the sea. Setting up a full-fledged CGD network with CNG stations and a pipeline for industrial and domestic consumers usually costs Rs 10-15 bn. Recently, the Petroleum and Natural Gas Regulatory Board (PNGRB) invited bids for installing and running a CGD network in several cities. The Board plans to take the CGD network to 200 cities by 2015.
Finance companies are trading mixed with HDFC and IFCI trading in the green while LIC Housing is witnessing selling pressure. India's largest housing finance company, HDFC, has chalked out a major foray into education. HDFC will look at small towns to either set up schools or take over defunct boarding schools. The entry into education will be made through a separate subsidiary. HDFC already has an educational loan unit-Credila Financial Services-in which it raised its stake to 51% in July.
According to players in the education sector, several schools are looking at a model that is profitable and scalable, as operating under trusts makes it difficult to segregate profits. Many schools would be open to the ‘takeover model' that HDFC plans to adopt.