Indian stock markets open weak

Wed, 7 Aug 09:30 am

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The major Asian stock markets have opened mixed with stock markets in Japan (down 1.9%) and South Korea (down 1.0%) leading the losses. However, the markets in Singapore (up 0.4%) and Indonesia (up 0.4%) have opened firm .The Indian equity market indices have extended yesterday's losses and have opened the day on a weak note. The weakness in the Rupee has brought Indian stock markets under pressure. The sectoral indices have opened mixed with stocks in auto and capital goods space leading the losses. However, the stocks in software and energy sectors have opened on a positive note.

The Sensex today is down by around 24 points (0.1%), while the NSE-Nifty is down by around 7 points (0.1%).Midcap stocks have opened in the red as well with the BSE Mid Cap index down by around 0.1%. However, small cap stocks have opened in the green with BSE Small Cap index up by around 0.1%. The rupee is trading at Rs 61.33 to the US dollar.

Power stocks have opened on a mixed note with Jaiprakash Power and Torrent Power Ltd leading the gains. However, KSK Energy and Gujarat Industries Power Company Ltd have were facing selling pressure. As per a leading financial daily, National Thermal Power Corporation (NTPC) and Larsen & Toubro Ltd (L&T) are eyeing a stake in the 2,400 Megawatt (MW) power plant proposed by Odisha Thermal Power Corporation Ltd (OTPCL) . The latter is a 50:50 joint venture between Odisha Mining Corporation (OMC) and Odisha Hydro Power Corporation (OHPC). The power plant is proposed to be set up Kamakhyanagar in Dhenkanal district at a cost of Rs 100 bn. As per an energy department official, around 49% stake in the project can be offloaded. However, no final decision has been taken in this regard yet. The project requires 1,969.8 acres of land which includes 987.77 acres of government land, 83.94 acres categorized as forest area and 982.015 acres of private land. The total land needed for the project will be procured by OTPCL. The power generated from plant will be procured by Gridco (the state owned bulk power purchaser) as per the tariff determined through the bidding process.

Engineering stocks have opened the day mainly in the red with Welspun CorporationLtd and Emco Ltd leading the losses. Crompton Greaves, a Mumbai based transformer and switchgear products manufacturer gas reported its results for the first quarter ending June 2013 (1QFY14). The company has reported net sales growth of 12.5% year on year (YoY). The operating profit for the quarter declined by 13% YoY with operating profit margins at 4.6%. The consolidated net profits for the quarter declined by 30% YoY. Segment-wise, the revenues for the Power systems segment were up 8.5% YoY; however, the earnings before interest & tax (EBIT) from the segment dropped by 36 % YoY. The consumer products and industrial systems divisions reported an EBIT growth of 10.5% YoY and 5.85% YoY respectively. The other income for the quarter grew by 90% YoY. The finance costs for the quarter were up two fold.