Mumbai: The shares of power-generating companies soared on Thursday amid the rising temperatures in India. Nifty Energy index nearly jumped 2 per cent on Thursday at the time of writing this article. Temperatures have started rising early, giving signals that Spring season is on its early way out and summer season setting in. The World Meteorological Organisation (WMO) has predicted that above-average land surface temperatures during the March-May period.
Why Power Stocks Are Rallying
As the shares of power and green energy companies jumped, Adani Total Gas stock recorded a rally of about 10%, NLC India rose nearly 6.60 per cent, JSW Energy went up 6.21%. Other stocks such as Coal India, BHEL, Adani Power, Tata Power appreciated around 4–6%. Stocks of Petronet LNG, Suzlon, GAIL, and NHPC witnessed buying.
The earnings of the above-mentioned companies are considered relatively stable, and energy demand also remains consistent.
The temperatures have been rising since March started. Delhi, Mumbai and other cities have been experiencing high temperatures. Brokerage JM Financial said the rise in temperatures has led to demand hitting 224.6GW on Tuesday, the highest ever recorded for March.
The brokerage said if the geopolitical tensions continue, there is a high probability of a LNG prices remaining on the higher side and intense summer could lead to a spike in coal-fired electricity.
The report also predicted shortage of hydro generation as there was less rainfall and snowfall in winter.
JM Financial predicted 16 stocks, including Adani Power, Tata Power, NTPC, Adani Green, Coal India and JSW Energy to rise.
Amid the West Asia crisis, the crude oil prices have spiked. The rising energy costs have shifted the tilt towards clean energy sources.
The Stock Markets settled with losses of 797.14 points at 76,066.57 on Thursday as crude oil prices surged. The NSE Nifty dropped 226.20 points to 23,640.65.
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