Indian equity markets had a rather volatile trading session today. The indices began the day's proceedings on a weak note although buying resumed thereafter pushing the indices into the positive. While the afternoon session saw the indices trade firm, albeit within a range, profit booking once again took its toll in the final hours causing the indices to close into the red. While the BSE-Sensex today closed lower by 90 points, the NSE-Nifty closed lower by 40 points. The BSE Mid Cap index lost 1%, while the BSE Small Cap index closed marginally lower. Barring IT stocks, losses were seen across sectors.
As regards global markets, Asian indices closed in the red today while European indices have opened on a weak note. The rupee was trading at Rs 56.76 to the dollar at the time of writing.
Most engineering stocks closed weak today with the key losers being Opto Circuits, Voltas and Larsen & Toubro (L&T). As per a leading business daily, L&T has bagged orders worth Rs 20 bn across various business segments in May and June. In terms of breakup, the building and factories segment bagged orders worth Rs 5.3 bn for the construction of office buildings in Bangalore and Ahmedabad. In the water and renewable energy business, the company has secured orders worth Rs 8 bn. Of this Rs 7 bn is an engineering procurement and construction contract for a solar power plant in Tamil Nadu.
In the transportation infrastructure business, the company secured orders worth Rs 4.5 bn. These are from Phase 3 of the Delhi Metro Rail Corporation (DMRC) project. In the power transmission and distribution business, the company got orders worth Rs 2.2 bn. These are from DMRC and the West Bengal State Electricity Transmission Company. It must be noted that for FY13, L&T's order inflow stood at Rs 880 bn, a growth of 25% YoY. The total order book at the end of the year stood at Rs 1,536 bn. 49% of the backlog belonged to the infrastructure sector while 28% belonged to the power sector. This is a positive for the company and signifies revenue visibility although timely execution will remain the key.
The scenario continues to worsen for drugmaker Ranbaxy. As per a leading business daily, Apollo Pharmacy has suspended sale and further procurement of medicines manufactured by Ranbaxy for now. This is after many of the major hospitals have restricted the use of the company's medicines. It must be noted that Ranbaxy has been in trouble with the US FDA since 2006 when its plants at Poanta Sahib and Dewas were found to not comply with good manufacturing practices. As a result, an import alert was issued and this significantly impacted the company's sales from the US business. Things have failed to improve thereon. A fortnight ago, Ranbaxy offered to pay a fine of US$ 500 m for selling adulterated drugs. It also pleaded guilty to 7 criminal counts including fudging of data, intention to defraud and failing to report that its drug didn't meet specifications. As a result, not only the US, but restrictions placed for its drugs are bound to have some negative impact on the company's sales from India as well. The stock closed marginally lower today.