Oil & Gas stocks push up markets

Thu, 17 Jun 11:30 am

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Markets are traded marginally in the positive during the previous two hours of trade after a volatile session in the morning. Key Asian markets are trading mixed. Stocks from the oil & gas and healthcare space are witnessing buying interest while stocks from the IT and realty space are trading in the red.

The BSE-Sensex is trading higher by around 6 points, while the NSE-Nifty is down by about 6 points. Some buying interest is being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.2% and 0.6% respectively. The rupee is trading at 46.54 to the US dollar.

Oil & Gas stocks are currently trading in the green. As per a leading news daily, RIL plans to bid for three Ultra Mega Power Projects (UMPPs) in Chhattisgarh, Orissa and Tamil Nadu. This will mark RIL’s entry into the power sector. However, its power foray is likely to be coal or renewable energy based. Further, RIL is also looking out for solar energy and renewable energy sources like wind and biomass as a major investment area in future. The company is not only planning to bid for UMPPs but is also on a look out for acquisition of power plants. It should be noted that RIL missed out on the power bonanza up till now because of the non-compete agreement signed with the ADAG group. However, with the barrier of non- compete agreement now being detached RIL is free to venture out in the power space.

RIL is in the process for purchasing the request for quotation (RFQ) documents for these UMPPs. The government has invited bids for the 4,000 MW UMPP in Chhattisgarh by July 05 and a similar project at Bedabahal in Orissa by July 30. The RFQ for the Tamil Nadu UMPP may be issued soon. With the government setting a target of adding over 200,000 MW of additional power generation before the end of the 12th Five-Year Plan in 2017, power generation is likely to be a lucrative destination for new as well as existing players.

Banking stocks are mainly trading in the negative with Federal Bank and Andhra Bank leading the declines. Indian Overseas Bank is however one of the top gainers in the sector. SBI announced that it will launch its wealth management initiatives in the current fiscal. The bank has so far already launched financial planning and advisory services. The bank also plans on setting up private equity funds as one of the new initiatives. This is part of the bank’s push into new businesses and in its effort to increase its fee based income.

The bank has also been seeing potential in India’s increased usage of credit and debit cards and plans to install 0.6 m point of sales terminals in the country over the next five years. These terminals will also be present in rural areas and increase sales of merchant establishments across the country. Mobile banking services are also expected to roll out soon.