Indian share markets open firm

Mon, 30 Jul 09:30 am

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Most major Asian equity markets have opened the day on a strong note with markets in Hong Kong (up 1.6%), Japan (up 0.6%) and South Korea (up 0.9%) leading the gains in the region. However, stock markets in China have opened on a weak note (down 0.1%). The Indian share market indices have also opened the day in green. All the sectoral indices have opened in green with stocks in the auto and FMCG leading the pack of gainers.

The Sensex today is up by around 145 points (0.9%) and the NSE-Nifty is up by around 40 points (0.8%). Mid and small cap stocks are also trading in the green with the BSE Mid Cap and BSE Small Cap indices up by around 0.5% each. The rupee is trading at Rs 55.24 to the US dollar.

Energy stocks have opened on a mixed note with Essar Oil and Indraprastha Gas Ltd (IGL) leading the pack of gainers. However, Oil India Ltd (OIL) and Mangalore Refinery and Petrochemicals Ltd. (MRPL) are seeing losses. As per a leading financial daily, Petronet LNG, the country's largest natural gas importer is in talks to set up a Rs 35 bn power plant next to its upcoming liquefied natural gas import terminal at Kochi in Kerala. The company had earlier proposed to set up a 1,200 Megawatt (MW) gas fired power plant. As per industry sources, it will be a 50:50 joint venture (JV) between the company and the Kerala Government. The latter will offer land for setting up the power plant which will be considered as part of its equity contribution in the project. Also, the state Government has shown interest in the company's condition to buy at least 75% of the power generated under a long-term power purchase agreement. The power plant will use liquefied natural gas (LNG) imported from Australia and will be priced at less than Rs 7 per unit. This is cheaper than Rs 11per unit that the Government is currently paying to buy power from some private generators. The expected time for the power plant to set up is four years. It is an important development for the company as the power plant will consume most of the costlier imported gas that the company had contracted from Gorgon project in Australia.

Telecom stocks have opened mainly in the green with Bharti Airtel and Mahanagar Telecom Nigam Ltd. leading the pack of gainers. As per a leading financial daily, the Central Bureau of Investigation (CBI) in its presentation to Joint Parliamentary Committee has said that the incumbent telecom operators Bharti Airtel and Vodafone India were allocated additional spectrum beyond 6.2 MHz. As per the report they were given up to 10 MHz in 2002 by the then communications minister, along with some officers in the DoT (department of telecommunications). As per CBI, the decision was taken bypassing the opinions of the member (finance), the wireless adviser and the Telecom Commission, the highest decision-making body in the DoT, which must clear all key decisions. This has apparently has led to a loss of Rs 5.1 bn to the exchequer. The development is significant as this is the first evidence of the 2G investigation. While until now, the 2008 licenses have been the focus of the scam, this is the first time CBI is close to take an action against the telecom companies that were incumbents before licenses were given in 2008.