The Hindu Business Line : Short-covering, value buy lift power stocks

The power sector is one of the most oversold sectors and investors seem to be picking up these stocks due to the attractive valuations, said market experts.

“The power stocks have been battered quite a bit in the last one year. They have gone down close to 70 per cent. And even in the last one month there was quite a bit of selling that took place in this sector,” said Mr Girish Solanki, a research analyst with Angel Broking.

The companies also have some good amount of cash in their books, added Mr Solanki.

The other stocks in the BSE Power index that gained were GVK (13.28 per cent), Neyveli Lignite Corporation (6.11 per cent), Power Grid (6.28 per cent), Suzlon (8.04 per cent) and Reliance Power (5.08 per cent). In the index, 13 stocks advanced while only 2 declined.

Marketmen said that investors were also covering their short positions before the Futures and Options expiry next Thursday. “Added to this the Dow Jones futures were also trading up,” said Mr Solanki.

The open interest positions on certain power stocks have seen an increase on Friday. BHEL’s open interest has jumped 25.42 per cent to 18.87 lakh; Reliance Infrastructure increased 14 per cent to 27.1 lakh; Suzlon’s 11.25 per cent to 2.3 crore and Power Grid’s 8.35 per cent to 1.3 crore.

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