Volatile trades!

After paring some gains in the initial part of the previous hour, the markets have regained their strength that was witnessed in the earlier hours of trade today. Apart from selective buying in index heavyweights, strength in stocks from the auto, FMCG, energy, pharma and sectors has propped up gains.

The BSE Sensex is trading at 6,205 (up 70 points) and the Nifty is trading at 1,919 (up 10 points). The rupee is trading at Rs 43.75 per US Dollar.

As per a leading business daily, international equity placement firm, BSMA, an affiliate of Bear Sterns Asia, has invested approximately Rs 270 m in Adlabs Films Limited (engaged in the business of multiplex, processing and production of films). The investment will be by way of preferential allotment of shares at Rs 150 per share. With this allotment the stake of the owners will reduce by 7.5%. Currently, promoters Manmohan Shetty and Vasanji Mamania hold 31.51% each. The objective of this allotment is to raise funds for increasing the number of multiplexes in different cities across the country. The company has plans to set up 30 multiplexes with 150 screens in total across India in next four to five years. The stock is currently trading 1% down.

Power stocks are witnessing selective buying and major gainers here include Tata Power (TTPW.BO, news) (2%), Reliance (RELI.BO, news) Energy and NTPC (both marginally up). As per a leading business daily, NTPC has decided to do away with the preference that was given to PSUs under the purchase preference policy of Government, which lapsed on March 31, 2005. As per the policy, PSUs were given a 10% price preference when bidding for contracts. Thus in competition to private players, PSUs were preferred if they fell in this 10% price band. One of the objectives of the policy was to provide support to ailing PSUs by enabling them to execute the contract even though their bids were not the lowest. The revocation is likely to affect companies like BHEL (BHEL.BO, news) , which are large equipment suppliers to power plants.

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