Barring Malaysia (down 0.4%), most major Asian stock markets have opened the day in the green with stock markets in Japan (up 2.1%) and Hong Kong (up 1.2%) leading the gains. The Indian share markets have also opened the day on a positive note. Barring the FMCG index, all sectoral indices have opened in the green with realty and auto indices leading the gains.
Engineering stocks have opened mainly in the green with Jyoti Structures Ltd and BGR Energy Ltd leading the gains. As per a leading financial daily, Larsen & Toubro (L&T) is planning to strengthen its project management team and to go in for subcontracting instead of hiring local staff in the Persian Gulf. It is to be noted that with domestic hydrocarbon business muted, the company has spread its operations in the Gulf and has been trying to get large orders in the segment for the last three years. The decision is in response to a loss of Rs 9.4 bn at the operating level in the hydrocarbon segment. The business has been impacted due to increase in wages in the Gulf region, changes in contract conditions, including mandatory hiring of locals, time and cost overruns and some delays from clients. Also, the company had to rework some of its projects to meet safety and quality standards in the region. The segment makes up around 7% of the company's order book.
Indian Pharma stocks have opened the day mainly in the green with J.B Chemicals and Aurobindo Pharma Ltd leading the gains. As per a leading financial daily, Sun Pharmaceutical Industries which is in the process of acquiring control of Ranbaxy Laboratories from Daiichi Sankyo, will aid Sun's growth in various ways as the company will be able to rationalize the research and development costs. Daichii's association with Ranbaxy will also help Sun to enter the Japanese market. One should note, the GMP norms in Japan market are very stringent and many generic companies have failed to establish themselves. Reportedly, the company's entry in Japan's markets is expected to take place three to four years after it closes its deal to acquire Ranbaxy and once basic issues at the company have been fixed. The deal worth US$4 bn is currently awaiting various regulatory clearances.