The Indian markets slipped into the red zone during the post noon trading session. Stocks from the realty, IT and metal spaces led the pack of losers. However, those from the consumer durables, auto and capital goods spaces are still managing to find favour amongst investors.
The Sensex today is trading lower by about 50 points (down 0.2%), while the NSE-Nifty is trading lower by about 20 points (down 0.3%). Stocks from the midcap and smallcap spaces are trading flat with the BSE Mid Cap and BSE Small Cap indices up by about 0.1% each. The rupee is trading at 54.33 to the US dollar.
Stocks of engineering companies are trading firm led by Lakshmi Machine Works, Jyoti Structures and Punj Lloyd. As per a leading financial daily, capital goods major Bharat Heavy Engineering Ltd (BHEL) is seeking levy of duties on imported solar equipment to shield the domestic industry from cheap imports mainly from China. Currently there is no duty on imported solar power equipment. It is to be noted that the government recently imposed higher duty on imports of power equipment. BHEL has been grappling with fuel shortages impeding new projects. As part of diversification strategy, the company aims to invest Rs 20 bn for manufacturing solar equipment such as silicon wafer, solar cell and solar module. But this investment would be viable only if the threshold domestic demand is ensured.
Power stocks are currently trading weak with GMR Infrastructure, PTC India and Power Grid Corporation of India leading the pack of underperformers today. It is reported that India's largest power producer National Thermal Power Corp (NTPC) has borrowed Rs 6 bn from the Jammu & Kashmir Bank, making this its hundredth term loan in about thirteen years. This loan is believed to have tenure of 15 years. It would be utilised to part finance the capex plans of NTPC. NTPC currently has an installed capacity of 39,674 MW. About 16,000 MW of capacity is believed to be under construction. At the end of FY12, the total debt on the company's book stood at Rs 642 bn, while its net worth stood at about Rs 744 a debt equity ratio of about 0.86. The company's interest coverage ratio also stood at a comfortable figure of over 7 times during the year ended March 2012.