Wednesday July 4, 02:30 PM
Upping the ante.... |
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By Equitymaster.com
The benchmark indices gained further ground during the previous hour of trade as buying activity gained momentum. Currently, while buying is being seen in steel and telecom stocks, software stocks are trading deep in the red as rupee scaled new highs against the dollar. The overall market sentiments are however negative with losers outnumbering gainers in the ratio of 1.2:1 on the NSE.
The BSE Sensex is trading at 14,852 (up 46 points) while the NSE Nifty is trading at 4,359 (up 1 point). The rupee is trading at 40.50 to the dollar.
Power stocks are trading mixed. Currently, while NTPC (up 1%) and Reliance (RELI.BO, news) Energy (marginally up) are garnering investors' interest, PTC (down 3%) and Tata Power (TTPW.BO, news) (2%) are out of favour. Reliance Energy is looking at hydel power generation for future growth. The largest private power distribution company in the country, which also generates 940MW through thermal projects, is planning to set up three hydel projects, having an aggregate capacity of 1,980MW. If successful, REL will invest almost Rs 70 bn and raise around Rs 56 bn as debt. REL is exploring hydro-based new power generation projects in Himachal Pradesh, Uttarakhand, and also in neighbouring countries like Nepal and Bhutan. It has already completed a detailed feasibility study for the 280MW Urthing hydro power project in Uttaranchal and has entered into an agreement with Arunachal Pradesh government for development of two hydro projects at Tato (700MW) and Siyom (1,000MW), for which preliminary studies are being conducted.
Engineering stocks are trading weak with Punj Lloyd (down 4%) and ABB (1%) being the key losers. BHEL (BHEL.BO, news) proposes to pick up equity in power projects using 800 MW thermal sets with super critical parameters. In a bid to encourage more power projects in this category, BHEL plans to acquire 10-20% equity in such plants. BHEL has already initiated talks with project developers including the state electricity boards of Maharashtra, Tamil Nadu and Andhra Pradesh for acquisition of equity. The 800 MW sets can bring in more efficiency and cut down on pollution by better burning of coal. The proposed plan coincides with its decision of enhancing its manufacturing capacity to 15,000 MW per annum with a total investment of around Rs 32 bn for the 11th Plan. In addition to holistic modernisation of facilities, the company would augment its capacity by 250% from 6,000 mw to 15,000 MW per annum. At present, BHEL is in the process of enhancing its manufacturing capacity from 6,000 MW to 10,000 MW per annum at a cost of Rs 12 bn and it will be available by the year-end. The stock of BHEL is trading marginally up.
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