Not quite the best of Muhurats!

Wed, 26 Oct Closing

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Indices in the Indian stock markets did not quite have the best of Muhurats and chose to close rather subdued in the rather truncated session. While the BSE-Sensex edged higher by a mere 34 points, gain on the NSE-Nifty was limited to 10 points. It was a somewhat cheerful Diwali however for the BSE Mid Cap and BSE Small Cap indices as they both edged higher by more than 1% each. Around three stocks gained for every two heavyweights that closed the day in the negative.

Most other Asian indices closed the day on a positive note whereas Europe was also trading in the green. The rupee was placed at Rs 49.4 to the dollar at the time of writing.

Unlike last Diwali where the Sensex closed at all time highs, the Muhurat session this time around had an air of cautious optimism about it. And that is to be expected perhaps. With most macro factors having a cross against their names, investors seem to be adopting a wait and watch approach. But we don't think this is how great fortunes are made. If a fundamentally good stock run by a good management is trading at attractive valuations from a long term perspective, then an investment should certainly be made as one cannot time the top and bottom to perfection. And the current environment is one such occasion we believe. Taking the plunge right now has a very good chance of lighting up your Diwalis in the times to come.

Power stocks traded strong today with leading gainers being GVK Power and Infra and Torrent Power. A major development for state-owned National Power Thermal Corporation (NTPC) is set to bring in some relief as far as coal supplies are concerned. In a week, the coal ministry is set to restore its five captive coal block allotments which were cancelled in May 2011. The five cancelled blocks have combined geological reserves that exceed 3 bn tonnes. The move will enable the company to ramp up its in-house coal production to 47 m tonnes per annum which will be one-fourth of its coal requirement over the next five years. It will help the company achieve its plan to more than double generation capacity to 75,000 MW. This development has taken place on account of several factors, the most important being the increasing gap between coal demand and supply.

Gas Authority Of India Limited Gail is planning to increase its presence in US by buying stakes in shale gas assets. The company also has plans to open an office in Houston to consolidate its presence there. It may be noted that in the last month itself, Gail had proposed to buy 20% stake in Carrizo Oil & Gas Inc, a shale gas asset company in the US. While the company hasn't doled out any specific timeline, it expects a breakthrough within the next six months or so. In addition, the company has plans to increase its pipeline network from 8,700 kms to about 10,000 kms in the current fiscal. It also expects to maintain its transmission volumes at 120 mmscmd while both top and bottom line are expected to report a growth of 15-20% on an annualized basis. The stock closed marginally higher today.