After opening into the positive, Indian indices notched steady gains as the day progressed led by sustained buying activity across index heavyweights. The buoyancy continued in the final trading hour too as the markets closed well above the dotted line. While the BSE Sensex closed higher by around 376 points (up 2%), the NSE Nifty gained around 113 points (up 2%). The BSE Midcap and the BSE Smallcap also notched gains of around 2% each. Gains were largely seen in metals, capital goods, auto and IT stocks.
As regards global markets, barring Hang Seng, Asian indices closed firm today while European indices have also opened in the green. The rupee was trading at Rs 44.53 to the dollar at the time of writing.
As per a leading business daily, steel major SAIL opines that the concerns with respect to cheaper steel imports harming local industry have reduced. This is because imports from China, which is the world's largest steel exporter, have dropped by as much as 45% in August. The reason for this drop is that steel production in China has also reduced. The Indian steel industry had asked for higher import duties on imported steel to protect the domestic industry but had not received support from the Steel Ministry. Chinese steel imports stood at 5 million tonnes (MT) in May this year, but fell to 4.3 MT in July and to 2 MT in August. China's steel production fell 1.1% to 51.6 MT in August 2010.
Further, SAIL is looking for coking coal mines in the US, Australia, Mozambique and Indonesia through International Coal Ventures Ltd. The latter is a joint venture with Coal India, NMDC, Rashtriya Ispat Nigam and NTPC. Plans on the anvil also include setting up a power generation capacity of around 4,600 MW as the demand for power is expected to rise to 1,900 MW by FY13 from 1,180 MW at present. The stock closed higher by 9% today.
Engineering stocks closed in the positive today and the key gainers here included BHEL, Punj Lloyd, Suzlon and L&T.
As per a leading business daily, engineering major L&T has bagged orders worth Rs 7 bn in the material handling and water segment. These are from Jabalpur Municipal Corporation, Haryana State Industrial and Infrastructure Development Corporation and Bhushan Steel. The scope of the work includes construction of drains, development of water supply facilities, wastewater collection and the like. It must be noted that L&T's order backlog grew by 50% YoY during 1QFY11. What is more, this backlog at the end of June 2010 stood at Rs 1,078 bn. This is a positive development for the company and will provide revenue visibility in the future. But execution will remain the key.
Pharma stocks closed firm today and the key gainers here included Cadila Healthcare, Glenmark and Wockhardt. Cadila closed higher by 6% today and has gained 36% in the past one year. The company reported robust results in 1QFY11 wherein sales and net profits grew by 26% YoY and 58% YoY respectively. Performance was largely driven by its US business, consumer healthcare business and API exports. Going forward, Cadila's growth is likely to be driven by increasing scale of its US and other export formulation businesses. Further, strong performances by the consumer healthcare and custom manufacturing businesses and the JV with Hospira are also expected to contribute to Cadila's overall growth going forward.