Indian stock markets languished in the red for a larger part of the session today. The indices began the day's proceedings on a weak note, and thereon selling pressure gradually intensified across index heavyweights pushing the indices deeper into the red. There was no respite in the final trading hour as well and the indices closed well below the dotted line. While the BSE-Sensex closed lower by around 478 points (down 3%), the NSE-Nifty closed lower by around 148 points (down 3%). The BSE Mid cap and the BSE Small cap were not spared either as they lost 3% each. With respect to sectoral indices, losses were largely seen in Oil and gas, auto and banking stocks.
As regards global markets, Asian indices closed mixed today while most European indices have opened in the red. The rupee was trading at Rs 49.24 to the dollar at the time of writing.
Pharma stocks closed mixed today. While Dr.Reddy's and Sun Pharma closed marginally into the positive, Biocon, Piramal Healthcare and Ranbaxy were at the receiving end. As per a leading business daily, pharma major Ranbaxy is looking to hand over its marketing operations in Latin America to its parent company Daiichi Sankyo. It must be noted that Ranbaxy's Latin American business has been facing pressure in recent times. While sales from this region fell by a third to US$ 13 m in the quarter ended December 2011, annual sales also fell 26% to US$ 61 m. The company, in the last two years has also exited China, Vietnam and Japan. Hence, this move is likely a part of the company's strategy to exit certain geographies and cut down costs. It must be noted that in CY11, Ranbaxy reported consolidated losses of Rs 29 bn despite a 13% growth in the topline.
Engineering stocks closed in red today with the key losers being BHEL, Blue Star, Crompton Greaves and Voltas. As per a leading business daily, engineering major Bharat Heavy Electricals (BHEL) has bagged a Rs 7.7 bn contract from upstream oil company Oil and Natural Gas Corporation Ltd. (ONGC). The contract involves manufacturing and supplying 6 onshore drilling rigs. Mechanical equipment will be manufactured by BHEL's Hyderabad plant, while electrical equipment will be manufactured by the company's Bhopal plant. BHEL has so far supplied 84 rigs, of which 71 have been supplied to ONGC and 13 to Oil India Ltd. Besides this, the company is also in the process of completing refurbishment and upgradation work of 7 more rigs of ONGC. It must be noted that this is a positive for the company given that its order book at the end of the December 2011 quarter stood at Rs 1.46 trillion, a decline of 9% on a sequential basis. The company had not managed to bag any material orders during the quarter. In fact, orders worth Rs 58.5 bn were cancelled amidst uncertainty in the business environment.