Markets extend early morning gains

Mon, 27 Jun 11:30 am

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Indian stock market indices made further inroads into the positive territory over the last two hours of trade as buying intensified across index heavyweights. Barring consumer durables, all sectoral indices are trading in the green.

The BSE-Sensex is up by 144 points while NSE-Nifty is trading 60 points above yesterday's closing. BSE Midcap and BSE Small cap indices are up by 0.6% each. The rupee is trading at 45.10 to the US dollar.

Engineering stocks are trading firm led by KSB Pumps and Everest Kanto Cylinder. As per a leading daily, BHEL is looking to increase its revenue from exports to Rs 45 bn. It is mainly looking at expanding operations overseas especially in Africa. At present, exports contribute 8-10% to the company's turnover. It may be noted here that the engineering company's export revenues last year amounted to Rs 40 bn. Apart from Africa, it is also focusing on South East Asia and Gulf countries. BHEL is interested in exploring any opportunity with respect to new markets, new technology or for strategic reasons. It has appointed Kotak Mahindra and Merill Lynch as advisors to scout for the right opportunities in the overseas market.

Power stocks are trading firm led by CESC Limited and Power Grid Corporation. As per a leading financial daily, Tata Power's Mundra project which is currently on track for completion could face delays. This is due to problems with the associated transmission link. Issues with forest clearance and right of way are holding up the transmission line which would be used for evacuating power from the project. This would result in bottling up of electricity from the initial units of the 4,000 MW project.

The main issue of the holdup is the line involving a wildlife and forest clearance in one of the patches. As per a company official, unless the forest clearance and the right of way issues are sorted out, the mandatory clearance cannot come through. Unless the clearance comes through, the construction of the line on that section cannot proceed. It may be noted that Tata Power had announced last month that the project was progressing as per schedule and the first unit of the project would be synchronized by September 2011. The company has already completed the critical steam blowing process at unit-I of the project. This project is one of the four Ultra Mega Power Project (UMPP) awarded till date in the country. When completed it will have five supercritical units of 800 MW each and would run on imported coal.