After languishing in the red throughout yesterday, Indian stock markets staged a comeback in today's session to close strongly into the positive. After a cautious opening, healthy buying activity across heavyweights intensified in the subsequent hours and led to the positive close. While the BSE-Sensex closed higher by around 473 points (up 3%), the NSE-Nifty closed higher by around 136 points (up 3%). The BSE Mid Cap and the BSE Small Cap also did well as they notched gains of 2% and 1% respectively. Gains were largely seen in oil & gas and metals stocks.
As regards global markets, Asian indices closed firm today while European indices have also opened on a positive note. The rupee was trading at Rs 49.17 to the dollar at the time of writing.
As per a leading business daily, FMCG major Dabur India plans to invest US$ 15 m in Sri Lanka to set up a new export-oriented beverage manufacturing plant. This is to capitalise on the rising demand for fruit-based beverages. Dabur makes fruit beverages under the brand name 'Real'. Dabur's beverages business has been doing well and the company expects this performance to continue going forward well. Hence the rationale for setting up this plant as it will augment the company's production capacity in order to meet the growing demand. The new plant will be set up at Gampaha, north of Colombo and will have a monthly capacity of 280,000 cases. The plant will be commissioned in Aug-Sept 2012. Dabur's food business had reported an over 28% growth in FY11 despite supply constraints and the international markets account for 22% of Dabur's sales. Hence, this move is a positive for the company and will augur well for its overall food business. The stock closed higher today.
Steel stocks closed firm today with the major gainers being SAIL, Jindal Steel and Tata Steel. As per a leading business daily, steel companies such as Steel Authority of India Limited (SAIL) and Tata Steel are faced with the problem of rising inventory pile-up on the back of weakening steel consumption. In the April-August period, while production of finished steel grew 9.9% YoY, consumption grew by a mere 1.3%. Consumption of steel from sectors such as construction, automobile and consumer durables has seen a decline in recent times. Further, a slowdown in industrial production coupled with successive hikes in interest rates has also acted as a dampener on demand. Because of the slowdown in consumption, imports of steel products have also dipped by 45%. The silver lining in the cloud is that exports did quite well during the period growing by 56.7% to 1.87 m tonnes.