After a subdued morning session that witnessed significant selling pressure, the Indian indices zoomed beyond the dotted line. This was after the 2QFY11 GDP growth figures beat estimates. Currently, heavyweights from the Sensex are trading strong with stocks from the realty space leading the pack of gainers. There is significant buying interest on the counters of power and auto stocks as well.
The BSE-Sensex is up by 128 points while NSE-Nifty is trading 40 points above the dotted line. BSE-Midcap is trading up by 0.9% while BSE-Smallcap index trading 1.3% above yesterday’s closing. The rupee is trading at 46.02 to the US dollar.
India's economy grew 8.9% YoY in the July-September quarter and returned to pre-financial crisis expansion levels. The second-quarter GDP growth beat expectations of growth of around 8.2% and was propelled by a 9.8% jump in manufacturing and an 8.8% leap in construction. The economy also got a boost from stronger farm production, which expanded 4.4%, thanks to a bountiful monsoon. With this reading, achieving an 8.5% for full year growth target does not seem to be difficult.
Power stocks are mainly trading in the green with Jaiprakash Power, Neyvelli Lignite and NTPC leading the gains. However, GVK Power & Infra and Tata Power are trading in the red. NTPC, India's biggest power producer, plans to place orders for generators worth at least Rs 328.5 bn by March 31 as it accelerates capacity addition to help reduce blackouts. The utility will buy nine generators of 660 megawatts each and the same number of 800-megawatt units. The equipment cost per megawatt is Rs 25-30 mn.
NTPC, which failed to meet its capacity addition target in the year ended March 31, aims to speed up construction of plants to meet demand in Asia's second fastest growing major economy. Capacity addition will more than double to 3,150 megawatts this year, with another 5,500 megawatts to follow in the year ending March 2012.