Markets open on a volatile note

Tue, 28 Sep 09:30 am

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The Indian markets have started today's session on a volatile note. The benchmark indices opened below the breakeven mark and have not been able to stay in the positive territory despite repeated attempts. Other key Asian markets are also in the red with Japan (down 0.8%) leading the pack of losers. The US markets ended lower by 0.4% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading strong with telecom majors attracting investors' interest. The BSE-Sensex is trading lower by around 15 points, while the NSE-Nifty is down by about 10 points. However, buying interest is being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.2% and 0.3% respectively. The rupee is trading at 45.11 to the US dollar.

Steel stocks have opened the day on a strong note. Gainers here include Tata Sponge and JSW Steel. As per a leading business daily, the 3 m tonne per annum (mtpa) steel plant proposed to be set up jointly by SAIL and Posco is likely to be operational in around three years. The detailed project for the integrated steel plant at Bokaro involving a cost of Rs 120 to Rs 150 bn is being processed and will be completed within two months. So far, it has not been decided as to who will have the majority stake in the joint venture. Interestingly, SAIL also hopes for a joint venture with Japan-based Kobe Steel within two months for setting up a speciality steel plant at Durgapur on around 100 acres of land. It will produce 0.5 mtpa of iron ore nuggets per annum with an iron content of 95%. It will entail an investment of Rs 50 bn. These nuggets can be manufactured without using coking coal, one of the vital inputs of steel making in India. Also, SAIL's capacity expansion plan which would see its steel output go up from the existing 14 mtpa to 24 mtpa by FY14, is on track. It will entail a capex of Rs 800 bn.

Power stocks have opened the day on a positive note. Gainers here include Reliance Power and Power Grid. As per a leading business daily, Power Grid has called for fresh offers from shortlisted bidders BHEL, ABB, and Siemens due to some technical reasons for its high voltage direct current (HVDC) sub-stations project. The project consists of HVDC sub-stations and an 800 Kv transmission line from Assam to Agra. The total project cost is around Rs 120 bn, out of which the sub-station portion alone is around Rs 70 bn. It may be noted that Power Grid owns and operates around 72,000 circuit km of transmission lines and transmits 45% of all power generated in India.