Indian indices continued to trade strong on the back of strong buying activity in heavyweights. Stocks from the consumer durables and IT space have continued to lead the pack of gainers. However, stocks from the oil & gas space are trading flat.
Currently, the BSE-Sensex
is trading up by around 100 points, while the NSE-Nifty is up by about 20 points. There has been some buying interest amongst the mid and small cap stocks as well with the BSE Midcap and BSE Small cap indices trading higher by 0.3% and 0.4% respectively. The rupee is trading at 44.91 to the US dollar.
Steel stocks are trading mixed with MMTC and Gujarat Mineral Devpt Corp. leading the gains. However, Jindal Saw and SAIL are trading in the red. SAIL is finding it difficult to increase production capacity at one of its smaller units, Visvesvaraya Iron and Steel Ltd (VISL). VISL is located in Karnataka and produces alloy steel and pig iron. SAIL had proposed to increase its annual capacity from 100,000 tonnes to 230,000 tonnes. But it has been unable to do so as it has failed to win new mining leases in the state. The state-owned firm has recently also faced delays in plans to set up a joint venture with South Korea’s Posco in Bokaro, Jharkhand and an integrated steel plant at a closed fertilizer unit in Sindri, Jharkhand.
Banking stocks are trading mixed with Union Bank, Allahabad Bank and Karnataka Bank trading firm while Canara Bank and Kotak Bank are trading weak. PNB has said that its plans to foray into insurance business are alive and it is looking for a joint venture partner. The second largest PSU lender has invited expression of interest (EoI) for strategic partnership in life insurance and non-life insurance business from Indian and international companies.
In June, PNB bought out the stakes of its insurance joint venture partners Principal Financial Group of Mauritius and 25% of Berger Paints. While the venture into the insurance business may be accretive in terms of fee income for the bank, it will also consume more capital.