Led by subdued results announced by IT bellwether Infosys, Indian equity markets languished in the red throughout the trading session today. The poor industrial production numbers only added on to the weakness. While the BSE-Sensex closed lower by 299 points, the NSE-Nifty closed lower by 65 points. The BSE Mid Cap and the BSE Small Cap were not spared either and closed marginally lower. Not surprisingly, IT stocks were the biggest losers with Infosys falling by 21%.
As regards global markets, Asian indices closed mixed today while European indices have opened in the red. The rupee was trading at Rs 54.59 to the dollar at the time of writing.
Engineering stocks closed mixed today. While Voltas and Crompton Greaves found favour, Larsen & Toubro (L&T) and Blue Star closed in the red. As per a leading business daily, Bharat Heavy Electricals Limited's (BHEL) Ranipet division is aiming to enter newer business segments such as sewage and water treatment plants. Accordingly, a 200 MLD (million litres per day) sewage treatment plant has been set up and the two business lines are expected to fetch revenues of Rs 4 bn by FY17. Earlier the company had signed a technology partnership with Japanese company Mitsubishi Heavy Engineering Industries from which BHEL expects business opportunity to the tune of Rs 15 bn annually. It must be noted that at the end of 3QFY13, BHEL's order book stood at Rs 1,137 bn with roughly 79% of it from the power sector.
Industrial growth continued to remain poor during the month of February 2013. The index of industrial production (IIP) slipped to 0.6% during the month on account of contraction in power generation, mining output and poor performance of manufacturing sector. For the April-February period of FY13, the industrial production growth stood at 0.9%, down from 3.5% in the same period of FY12. This does not spell good news for the Indian economy, which reported slowest growth in the last two quarters. It will be interesting to see what the Reserve Bank of India (RBI) chooses to do in its next monetary policy. In its mid-quarterly Monetary Policy review in March, the central made yet another rate cut in the repo rate to the tune of 0.25% as the services sector, which was usually the bastion of growth, decelerated to its slowest pace in a decade. Although industrial production in January picked up to 2.4% growth after two months of contraction, the recovery was still weak and a stimulant was required.