Banking, tech. stocks in favour today

Fri, 13 Jul 01:30 pm

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The Indian equity markets traded in a range bound manner during the post noon trading session. Stocks from the banking, technology, oil & gas and IT spaces seem to be garnering the market participants' interests as their respective indices are leading the pack of sectoral indices. Stocks from the consumer durables, metal and FMCG spaces are the top underperformers at the moment.

The Sensex today is trading higher by about 73 points (0.4%), while the NSE-Nifty is trading higher by about 22 points (0.4%). The BSE Mid Cap and BSE Small Cap indices are trading higher by about 0.5% and 0.6% respectively. The rupee is trading at 55.57 to the US dollar.

Stocks from the oil & gas spaces are trading firm led by Gas authiority of India Ltd (GAIL), Petronet LNG and Oil and Natural Gas Corporation Ltd.(ONGC). As per a leading financial daily, Bharat Petroleum Corporation (BPCL) has signed a Memorandum of Understanding (MOU) with South Korea based LG Chem for setting up a petrochemical plant. The plant will entail a capital expenditure of Rs 40 to 60 bn and is being set up adjacent to BPCL's refinery complex in Kochi. The project essentially comprises setting up of petrochemical fluid catalytic cracker for generation of 500 TMTPA of propylene. This development will enable BPCL to diversify into petrochemicals. The company has said that over the next five years, it would be expanding its Kochi refinery at a cost of Rs 140 bn. The establishment of the petrochemical plant is expected to be completed in line with the refinery expansion project.

Stocks of auto ancillary companies are trading firm led by Mahindra Forgings, Asahi India, SKF India and Amtek Auto. As per reports, the flagship company of the Murugappa Group, Tube Investments of India (TII) has signed a share purchase agreement to acquire 44.1% stake in Coimbatore-based Shanthi Gears Ltd. The latter involved in the business of manufacturing industrial power transmission products. It is believed that TII will be buying the entire 44.1% stake of the promoters of Shanthi Gears for a sum of Rs 2.9 bn. Consequently, TII will have to make an open offer and acquire 26%. As per reports, the cost of the acquisition (including the public offer) is expected to be Rs 4.6 bn. This is taking into consideration full response to the proposed open offer. As per the TII's management, the company is looking at leveraging its expertise and knowledge in the engineering domain along with its relationship to scale the business further. In addition, this acquisition will help TII diversify its business and in turn, reduce its dependence on the auto sector.