Key benchmark indices hovered in positive terrain in morning trade as firmness in Asian stocks boosted sentiment. At 10:23 IST, the barometer index, the S&P BSE Sensex was up 115.69 points or 0.4% at 28,406.96. The Nifty 50 index was up 32.70 points or 0.39% at 8,779.55.
In overseas stock markets, Asian stocks rose tracking higher finish in US stocks yesterday, 28 September 2016 after the Organization of the Petroleum Exporting Countries (OPEC) took an important step toward a cap on crude-oil output, which helped in lifting oil prices. OPEC said it would reduce output to a range of 32.5-33.0 million barrels per day (bpd), a reduction of 0.7-2.2% from OPEC estimates of its current output at 33.24 million bpd. In economic data, US orders for durable or long-lasting goods flattened out in August after a sizable gain in the prior month, pointing to ongoing difficulties for American manufacturers.
Closer home, the broad market depicted strength. There were more than two gainers against every loser on BSE. 1,343 shares rose and 633 shares fell. A total of 133 shares were unchanged. The BSE Mid-Cap index was currently up 0.24%, underperforming the Sensex. The BSE Small-Cap index was currently up 0.58%, outperforming the Sensex.
Shares of oil production and exploration firms rose after global crude oil prices spurted in the previous session. Cairn India (up 1.39%), Reliance Industries (RIL) (up 1.53%), and ONGC (up 2.03%) gained. Higher crude oil prices would result in increase in realizations from crude sales for oil exploration firms.
Oil India rose 0.96%. Indian Oil Corporation rose 0.94% and BPCL gained 0.4%. The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi yesterday, 28 September 2016 gave its approval to an Indian consortium comprising Oil India (OIL), Indian Oil Corporation (IOCL) and Bharat Petro Resources (BPRL), a subsidiary of BPCL for acquiring 23.9% stake in JSC Vankorneft and 29.9% stake in LLC Taas-Yuryakh from Rosneft Oil Company (Rosneft), the National Oil Company (NOC) of Russian Federation (Russia). Rosneft operates Vankor and Tass-Yuryakh fields and are its wholly owned subsidiaries.
The acquisition of stake in Vankorneft will provide 6.56 million metric ton of oil equivalent (MMTOE) and 29.9% stake in Taas-Yuryakh will provide 0.5 MMTOE initially and 1.5 MMTOE by 2019. The acquisition is in line with India's stated objective of adding high quality international assets to its exploration & production portfolio and thereby augmenting India's energy security. The consortium will be paying $2.02 billion for acquiring stake in Vankorneft and $1.2 billion for acquiring stake in Taas-Yuryakh. Earlier in May 2016 ONGC Videsh (OVL) completed the formalities of acquiring 15% stake in Vankorneft at the cost of $1.284 billion which gave OVL 4.11 MMTOE.
The acquisition will add 8.06 MMTOE to India's overseas oil and gas asset. It will also provide an opportunity to Indian public sector Oil and Gas companies to absorb newer technologies with Rosneft and British Petroleum (BP). BP acquired 20% stake in Taas-Yuryakh from Rosneft last year.
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HPCL gained 0.62%.
In the global commodities markets, Brent for November settlement was down 5 cents at $48.64 a barrel. The contract had jumped $2.72 a barrel or 5.91% to settle at $48.69 a barrel during the previous trading session after OPEC members agreed to curb output in a surprise deal.
Capital goods stocks gained. Bharat Heavy Electricals (Bhel) (up 0.42%), Havells India (up 1.13%), ABB India (up 0.3%), Bharat Electronics (up 0.62%), Thermax (up 1.16%), and Siemens (up 0.32%) gained.
L&T rose 0.67% after the company said its construction arm won orders worth Rs 2046 crore across various business segments. The announcement was made during trading hours today, 29 September 2016.
Eros International Media rose 3.22% after the company said it tied up with UAE's Phars Film for co-production and distribution of Malayalam movies. The company announced its association with UAE's largest film distribution and exhibition network (Hollywood & Bollywood), Phars Film. The partnership will entail the two companies jointly co-producing Malayalam films along with exploration of theatrical rights between the two entities. The deal licenses Eros to exploit the distribution of all Malayalam movies produced jointly in India, while Phars Films would present the same overseas where it enjoys a dominant market share. The announcement was made after market hours yesterday, 28 September 2016.
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