Indian indices up on global cues

Thu, 2 Dec Closing

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Aided by strength in auto, commodity and telecom stocks, the benchmark indices on Indian bourses managed to hold on to their gains despite some brief stints of selling pressure. Consequently, the Sensex closed with gains of around 143 points whereas gains in the Nifty stood at around 51 points (both up 0.8% each). BSE Mid cap and small cap indices also performed well, registering gains in the region of around 1.2%

Almost all of Asia closed strongly today whereas Europe has also opened on a positive note. The rupee was trading at Rs 45.2 to the dollar at the time of writing.

The country's largest power producer NTPC, which is scouting for coal properties abroad to fuel its power plants back home, may zero in on Indonesia for its proximity, compared to Australia and Africa. As per a business daily, the company's decision comes on the back of logistics and cost constraints. The company is also scouting for coal properties in the Australian continent and may acquire coal blocks in Queensland and North South Wales. NTPC coal requirement is likely to touch 165 m tonnes (MT) in the FY12, of which it may import 12-15 MT. The company currently generates over 32,000 MW of power, of which nearly 60% is coal-based. It is planning to ramp up this capacity to 50,000 MW by FY12.

One of the largest private sector banks in the country, HDFC Bank has cited optimism over the average credit growth of 18% to 20% sustaining till the end of the fiscal. Banks currently seem to be more worried about the likelihood of slippages. The recent cases of NPAs in microfinance sector have already dealt a blow to the banks as well. Realty and telecom sectors continue to be classified in the 'doubtful' category of loans. However, as per HDFC Bank these instances are unlikely to impact the flow of credit from the sector.

In what may bring plenty of relief to the RBI and the government, food inflation in India has eased for the seventh straight week. Pushed down by normal monsoons and new crop arrivals in the market, food inflation have shown consistent signs of weakening in the recent past. It rose to more than 17% in January which drove the headline inflation (WPI) to double digits and prompted the central bank to raise key rates. The government expects food inflation to ease further and settle at around 6% by the end of FY11.

While the lower food prices may not do away with the possibility of the RBI raising interest rates, the same may certainly get deferred based on the overall inflation scenario.