After starting on a positive note, the Indian stock markets lost some traction during previous two hours of trade. They could not hold on to the opening gains and pared some of it on account of profit booking in realty, auto, telecom and FMCG sectors. Nevertheless, stocks from healthcare, metal, energy and consumer durable sectors are managing to find investorsí favor.
The BSE-Sensex and the NSE-Nifty are trading higher, up by 52 points and 20 points respectively. The BSE-Midcap and BSE-Smallcap are trading in the positive, up by around 0.43% and 0.75% respectively. The rupee is trading at 45.51 to the dollar.
According to a leading business daily, Indiaís largest engineering company L&T has won an order worth Rs 9.8 from the Indian defense ministry. This order will require L&T to design and construct 36 high-speed interceptor boats which will be used by the coast guards for patrolling the high seas. It will build these boats in its shipyards in Gujarat and Tamil Nadu with the expected delivery time of 18-19 months. It may be noted that the company is betting big on the defense sector as a future growth driver.
It may be noted that L&T has been involved in India-Russia project for building the supersonic cruise missile BrahMos and also in construction of a nuclear-powered submarine in association with the DRDO (Defence Research and Development Organisation). Given L&Tís experience of working with the defense sector, we believe that the company has lot to gain from the opening up of the defense sector to private players. The governmentís trust creates a huge entry barrier to new entrants. However, the orders can be sporadic making the future prospects a little unpredictable. Engineering stocks like L&T, Crompton Greaves and BHEL are currently trading in the green.
According to a leading business daily, India's largest private sector lender ICICI Bank has got a Qualified Full Banking (QFB) status in Singapore. This means that the bank through its Singapore branch can launch full banking services in Singapore going forward. It may be noted that since 2003, the bank has been offering banking services like international loan syndication and corporate banking in Singapore. With the new QFB approval the bank will also be able to take deposits and disburse loans in Singapore. ICICI Bank believes that this is significant for the bank as it expects the client base to increase significantly in the market. This will also strengthen the bankís footprint in terms of corporate, commercial, wealth management and direct banking services in the region. Though this appears to be a positive for the bank, we hope that it does not go over the board in aggressively tapping the market and as a consequence amass more bad debts on its books. Currently, the stock of ICICI Bank is trading lower.