Investors prefer small, midcaps

Tue, 13 Jul 01:30 pm

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The Indian markets continued to trade weak with the benchmark index trading below the dotted line during the previous two hours of trade. However, the overall market breadth seems to be going the other way as there are more gainers than losers at present. The advance to decline ratio is poised at 1.1 to 1 on the overall BSE. Moving on to the sectoral performance, stocks from the realty, oil & gas and capital goods spaces are leading the pack of gainers, while those from the IT and FMCG packs are amongst the top losers.

The BSE-Sensex is trading down by around 60 points (down 0.4%), while the NSE-Nifty is down by about 15 points (down 0.3%). Stocks from the midcap and smallcap spaces are in favour as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.3% and 0.4% respectively. The rupee is trading at 46.89 to the US dollar

Power stocks are currently trading firm led by CESC, Reliance Power and Tata Power. As per a leading business daily, power major NTPC may invest about Rs 80 bn in the state of Gujarat for setting up a coal-based power project with a capacity of 1,320 megawatts (MW). It is reported that if the company gets the desired resources (mainly coal supply - both imported and domestic), it may scale up the investment in the project taking the plant capacity to about 1,980 MW. For the same, the investment will stand at about Rs 100 bn.

The Gujarat government has identified about 1,200 acres of land at Dhuvaran (located in the Anand district). In return, the Gujarat government will receive about 50% of the power that would be generated from the proposed project. The final decision on the project will be taken after a multifunctional team of NTPC submits its report.

Aluminium stocks are currently trading firm led by Nalco and Hindalco. In a move to secure its raw material needs, state-owned aluminium producer Nalco has been on the lookout for acquiring mineral reserves abroad. The company has recently announced that it has identified three mineral assets. One each in Chile, Namibia and Indonesia. In Chile, the company has identified a bauxite mine, while in Namibia, it has identified a copper mine. In, Indonesia, Nalco has identified a coal block. The company also plans to tie up with other companies to secure raw materials. These minerals include uranium and copper. However, the estimated reserves of the blocks are not known as of now. A leading business daily has reported that Nalco is in the process of floating separate ventures in the foreign countries to buy out the reserves. As per the company’s management, the acquisition of these reserves will be funded through a debt and equity route, for which the ratio would possibly be 2:1. It may be noted that the company would be utilising these minerals mainly at its upcoming unit in Indonesia, which would be having a captive thermal power plant.