Wednesday April 18, 01:30 PM
Northward journey continues... |
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By Equitymaster.com
Markets continued to gain ground during the previous trading hour with sustained buying interest in the index heavyweights. The advance to decline ratio continued to be in favour of advances with only 6 of the Nifty stocks trading in the red. Buying interest is not just restricted to frontline stocks as advances are outnumbering declines in the ratio of 2.3:1 on the NSE.
The BSE Sensex is trading at 13,753 (up 147 points) while the NSE Nifty is trading at 4,035 (up 50 points). The rupee is trading at 41.95 to the dollar.
Energy stocks are currently trading mixed, with HPCL and BPCL featuring among the major losers (each down 1%) and ONGC being the major gainer (up 2%). According to a leading business daily, the sharp appreciation of rupee vis-à-vis the dollar is likely to benefit public sector oil marketing companies (HPCL, BPCL and IOC) and their subsidiaries as they would be able to buy more crude oil per rupee. India imports almost 78% of its crude oil requirements though it is a net exporter of petroleum products (which would be hit by a rising rupee). Every 1% rise in the rupee causes an erosion of 25-50 basis points in the profit margins of petroleum exporters. It must be noted that the rupee has appreciated by around 3.6% so far this month. The rupee appreciation, however, is unlikely to benefit private petroleum major Reliance (RELI.BO, news) Industries (RIL) as the savings on lower import cost of crude is likely to be nullified by the expensive exports of petroleum products. RIL exports around 80% of the petroleum products from its refinery.
Aviation stocks are currently trading firm, with Deccan Aviation (up 3%) and Jet Airways (up 3%) being the major gainers. According to a leading business daily, the competition on the India-U.S. route is likely to increase as the two rival private airlines - Jet Airways and Kingfisher Airlines are likely to start their operations in the latter half of the year. While, Jet Airways is in talks with Boeing to advance aircraft deliveries to start the US service, Kingfisher Airlines, which is awaiting approvals to fly abroad, has already started a branding exercise for its US foray. As per industry estimates, over 1.5 m passengers travel on the India-US route and this figure is growing at 10% per annum. Though as per current norms, a private airline should have completed five years operations for obtaining an international license, Kingfisher is ready with an alternate plan to start services from the US to India, using its US subsidiary, Kingfisher International.
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