On slippery ground?

While the markets have largely restricted themselves to a range, they have slowly and steadily given up most of their early mornings gains. While the index heavyweights are trading mixed, weakness in sectors like auto, software, steel and telecom have led to the indices paring their gains. However, banking, cement, energy, engineering and select FMCG and pharma stocks are in favour.

The BSE Sensex is trading at 6,481 (up 16 points) and the Nifty is trading at 2,029 (up 4 points). The rupee is trading at Rs 43.74 per US Dollar.

As per a leading business daily, NTPC, the country's largest power generation company, plans to start producing 50 m tonnes (mt) of coal annually from FY10. The company has sought 16 mining blocks from the ministry and proposes to set up its power projects near them. The main reason behind this proposed move is to reduce the coal shortage currently faced by NTPC. The company has also drawn up a plan to hike its presence in the hydropower sector by adding 5,000 MW in the eleventh plan (2007-2012). The total coal production will enable NTPC to overcome 50% of its coal shortfall, currently estimated at 100 MT. The management has indicated that the main reason to set up its projects near the coal mine blocks is to avoid issues related to quality, delivery and delays in transportation. Going forward, this has the potential to reduce costs for NTPC, since coal is a key raw material for power companies and having a captive source of coal would considerably lower costs than imported coal. The company has plans to become an over 45,000 MW company by the year 2012. The stock is currently trading higher by 1%.

Tyre stocks are trading mixed on the bourses today. Apollo Tyres has raised product prices, across its entire range catering to the replacement market, by around 3% to 4% with effect from April 1. The company is also in talks with various original equipment manufacturers for a price increase. This hike comes nearly a month after the company cut product prices by 2% to 4.5% in order to pass on the benefits of a change in the duty structure announced in the Union Budget. Tyre makers continue to face pressure on account of rising crude, steel and natural rubber prices, which form a significant part of their operating costs. The current move would ease some pressure off the tyre companies as far as their operating margins are concerned. The Apollo Tyres stock is trading flat. Ceat (CEATd.BO, news) , Goodyear and MRF (MRF.BO, news) are all up 1% each, while JK Industries is trading lower by 2%.

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