Indian share markets open firm

Thu, 27 Sep 09:30 am

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Barring Japan (down 0.2%), all major Asian stock markets have opened the day on a firm note with markets in Indonesia (up 0.8%), Malaysia (up 0.6%) and Hong Kong (up 0.5%) leading the gains in the region. The Indian share market indices have opened the day in the green. Stocks in the realty and FMCG space are leading the gains. However, power stocks are trading weak.

The Sensex today is up by around 44 points (0.2%), while the NSE-Nifty is up by around 11 points (0.2%). 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% and 0.8% respectively. The rupee is trading at Rs 53.43 to the US dollar.

Power stocks have opened the day on a weak note with Tata Power, Adani Power and Torrent Power trading in the red. On account of the higher cost of imported coal, Tata Power had put forth a demand to revise the contracted tariffs for power from its 4,000 megawatts Mundra ultra mega power project (UMPP) that was sold in five states which includes Gujarat, Maharashtra, Haryana, Punjab and Rajasthan. However, states buying electricity from the company's UMPP located in Gujarat have turned down the plea. In a petition filed with the power regulator, Central Electricity Regulatory Commission (CERC), power distribution companies from these five states have stated that they were unwilling to pursue any discussions with Tata Power on the matter of tariffs. Since last year, private power producers such as Adani Power, Reliance Power and Tata Power have been seeking hikes in power tariffs to compensate for the higher cost of imported coal from Indonesia. However, government officials have argued that an increase in tariff would be unfair to bidders who had lost out to these players.

Oil and gas stocks have opened the day on a mixed note with Reliance Industries and Oil India trading in the red. However, Bharat Petroleum Corporation Ltd (BPCL) and Gujarat State Petronet Ltd (GSPL) are trading firm. As per a leading financial daily, ONGC Teri Biotech Limited (OTBL) is planning to bid for the over Rs 150 bn worth desert oil slick clean up contract in Kuwait. The contract will be for cleaning up the oil slick created in the Gulf war that followed Iraq's invasion of Kuwait in 1990. If OTBL manages to bid successfully, it will use its oil zapper technology for the project. It must be noted that the technology is a bacteria that eats away the oil part of the contaminated soil. OTBL is a joint venture of state run explorer Oil and Natural Gas Corporation (ONGC) and The Energy and Research Institute (TERI) with each having a stake of 49.98% and 48% respectively.