Realty stocks lead markets higher

Fri, 1 Oct 09:30 am

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The Indian markets have started today’s session on a positive note. The benchmark indices opened above the breakeven mark and have stayed in the positive territory. Other key Asian markets are in the green with Japan (up 0.9%) leading the pack of gainers. The US markets ended lower by 0.4% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading strong with realty majors attracting investors’ interest. The BSE-Sensex is trading higher by around 130 points, while the NSE-Nifty is trading up by around 30 points. Buying interest is also being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 1% and 0.9% respectively. The rupee is trading at 44.84 to the US dollar.

Energy stocks have opened the day on a strong note. Gainers here include Reliance Industries and ONGC. As per a leading business daily, the government plans to offer tax incentives based on investments made by companies in oil and gas blocks under the upcoming NELP-IX auctions. Under the new Direct Taxes Bill, tax concessions are linked to investment. That is in contrast to the current scheme where firms don’t get tax breaks unless they find commercially viable oil or gas reserves. This will attract oil and gas exploration and production companies as it is an inherently risky business. Moreover, it will bring the tax status of natural gas exploration at par with crude oil. It may be noted that under some earlier rounds, crude oil production attracted a tax break, while production of natural gas did not. The government has identified around 35 blocks to be auctioned under the ninth round of New Exploration Licensing Policy (NELP-IX).

Aluminium stocks have opened the day on a mixed note. While Nalco has opened in the positive, Hindalco has opened weak. As per a leading business daily, Nalco plans to transform itself from an aluminium producer to a broader metals producer and energy provider. It has completed the second phase of its expansion by raising it alumina capacity to 2.1 MT, aluminium capacity to 0.46 MT and power capacity to 1,200 mega watts. This was done at a cost of Rs 78 bn. It now ready with its third phase of expansion and plans to spend Rs 60 bn to enhance alumina capacity to 2.9 MT and aluminium capacity to 0.57 MT. It will also expand power generation to 1,700 mw. The company has set a target of producing 1.7 m tonnes (MT) of aluminium and 4 MT of alumina by 2020.