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Indian mkts stage a strong recovery
Mon, 29 Aug Closing

Indian stock markets began the day's proceedings on a positive note today and the momentum intensified in the ensuing hours led by heavy buying activity across index heavyweights. This buoyancy was sustained in the final trading hour as well as the indices closed well above the dotted line. While the BSE-Sensex closed higher by around 568 points (up 4%), the NSE- Nifty closed higher by around 172 points (up 4%). The BSE Midcap and BSE Small cap also did well as they notched gains of 2% each. Gains were largely seen in metals, IT and banking stocks.

As regards global markets, Asian indices closed mixed today while European indices have opened in the green. The rupee was trading at Rs 45.97 to the dollar at the time of writing.

Steel stocks closed in the positive today and the key gainers here were Tata Steel and Steel Authority of India Ltd (SAIL). As per a leading business daily, steel major Tata Steel is looking to build new tube units to capitalise on the growing demand from oil and gas and construction sectors. Plans on the anvil include adding capacity in the hollow sections for construction applications through a new unit in Kalinganagar and another unit for oil and gas applications. The company is likely to invest about Rs 4 bn to set up a 300,000 tonnes a year unit in Kalinganagar. It is also scouting for a location in the coastal area for the unit that will cater to oil and gas. It must be noted that the tubes division has a current capacity of 400,000 tonnes a year, which accounts for a tenth of Tata Steel's flat product output of 4 m tonnes a year. This move is part of Tata Steel's strategy of expanding its flat products output to 12 m tonnes per annum (mtpa) by FY16 through new capacity addition. The tubes division had reported revenues of Rs 19 bn in FY11, which was about 7% of Tata Steel's India turnover.

Auto stocks also closed firm today and the key gainers here were Bajaj Auto, M&M and Tata Motors. As per a leading business daily, auto major Maruti Suzuki is continuing to have problems at its Manesar factory. In a latest development, the company temporarily halted production at one of its two factories at Manesar in Haryana due to problems with workers. The Manesar plant produces Swift, A-Star hatchbacks and the SX4 sedan. This is likely to affect sales volume growth for the company at a time when the auto industry is already facing headwinds in the form of rising input costs, interest rates and fuel prices. This was also evident in the company's 1QFY12 results, where there was a 1% YoY dip in sales volumes. Besides a tepid demand in the domestic market, the company's exports were also badly hit as sales fell by 24% YoY. The stock closed higher today.

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Mar 21, 2018 (Close)