Sensex in India Advanced 0.7%; Oil Blocks Auctions Attract 74 Bids

Devan Biswas
28 Mar, 2011
New York City

Stocks in Mumbai traded higher after the crude oil eased and investors focused on earnings season. Reliance Industries announced a joint venture with U.S. based D.E. Shaw Group to expand in financial services. India attracted 74 bids for 33 oil blocks in its nine round of auction.

[R]4:30 PM Mumbai – Stocks in Mumbai traded higher after the crude oil eased and investors focused on earnings season. Reliance Industries announced a joint venture with U.S. based D.E. Shaw Group to expand in financial services. India attracted 74 bids for 33 oil blocks in its nine round of auction.[/R]

Stocks in Mumbai trading closed higher after crude oil future declined and investors focused on the earnings release in two weeks.

The Sensex in Mumbai trading increased 127.50 or 07% to close at 18,943.14 and the Nifty index increased 33 to close at 5,687.25.

The rupee edged higher to close at 45.80 to a dollar and price of ten grams of gold traded up at Rs 20,829 and silver closed lower Rs 549 to Rs 54,928.

The market optimism was rooted on the hopes that the weekend advance by the Libyan rebels will resume the oil production and meet the European demand.

Oil Bocks Get 74 Bids

India attracted 74 bids for 33 oil and gas explorations blocks in the latest round of auctions today. The auction attracted several bids from the state owned companies and from private sector companies BG Group Plc and BHP Billiton Petroleum, a subsidiary of BHP Billiton.

The large multi-national companies stayed away of auction for the sixth time as the country regulates the retail and wholesale prices in India. Most multinational companies prefer to operate in markets where they can generate at 300% gross margin to their production cost.

In all 37 companies participated in the auctions of which eight were based overseas and 33 bids were submitted by state run oil companies and 41 from private companies.

ONGC and Oil India Corp placed 29 bids according to D.N. Narasimha Raju, joint secretary for exploration at the oil ministry.

The ninth round of exploration licenses are expected to award blocks in three months and contracts are expected to be final in four months.

Stock Movers

Reliance Industries declined 0.2% to Rs 1,024.10 after the regulator S.K. Srivastava said that the company may struggle to reach its peak output from 53 million cubic meters a day to 80 million cubic meters a day till April 2012.

The largest industrial conglomerate also said it struck a joint venture with the U.S. based D.E. Shaw Group to expand financial services business in India.

Other stocks in the sector close mixed. ONGC increased 1.1% and Indian Oil Corp added 1%. GAIL India declined 2.3% and HPCL dropped 0.5%.

Tata Motors soared 3.3% to Rs 1,223 and Mahindra & Mahindra added 0.8% and Maruti Suzuki increased 2%. Hero Honda added 0.7% and Bajaj Auto increased 1.7%.

NTPC increased 1.5% after the company is expected to increase 4,320 megawatts of power generation capacity in the next fiscal year beginning later this week.

Jaiprakash Associates declined 2.2% to Rs 88.35 after the stock had surged 10% in the last one week of trading.

State Bank of India increased 1.3% on the expectations that the bank will float Rs 20,000 crore issue in the second quarter of next fiscal year.

ICICI Bank increased 0.6% and HDFC Bank added 1.3%.

Hindustan Zinc declined 0.8%, Hindalco Industries dropped 0.5% and Sesa Goa declined 1.7%.

Bharti Airtel increased 2.6% on the media reports that the company has added 600,000 3G subscribers, since its launch in late January.