While the Indian stock markets began the day's proceedings on a cautious note, the morning session saw the indices trade in the green albeit within a range. With Infosys reporting good set of numbers for 2QFY12, buying activity across heavyweights intensified in the afternoon session. This momentum was maintained in the final trading hour as well and the indices closed well above the dotted line. While the BSE-Sensex closed higher by around 422 points (up 2.5%), the NSE-Nifty closed higher by around 125 points (up 2.5%). The BSE Mid Cap and the BSE Mid Cap also did well to notch gains of 1% each. Gains were largely seen in IT, banking and metals stocks.
As regards global markets, Asian indices closed mixed today while European indices have opened on a positive note. The rupee was trading at Rs 48.99 to the dollar at the time of writing.
Energy stocks closed mixed today. While Oil and Natural Gas Corporation Ltd. (ONGC) and Cairn India found favour, Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) closed in the red. As per a leading business daily, ONGC Videsh Ltd (OVL), the overseas arm of Oil & Natural Gas Corporation (ONGC), signed an agreement with the Kazakh government to take a 25% stake in Kazakhstan's Satpayev offshore exploration block. Till now, the exploration and production agreement for the Satpayev block was only between KazMunaiGas and the Kazakhstan government. This agreement was amended to include OVL too as a 25% partner. On the cost front, OVL paid US$ 13 m as a signing amount to Kazakhstan and will also pay US$ 80 m as a one-time assignment fee to KazMunaiGas (KMG). Plus, OVL has committed a minimum exploration investment of US$ 165 m and an additional optional expenditure of US$ 235 m to the project. The Satpayev block is located in the North Caspian Sea and has two prospective areas that hold an estimated 256 m tonnes of oil and natural gas resources. It lies near four major discoveries. OVL estimates a peak output of 287,000 barrels per day from this block. Given India's rising energy needs and the fact that it imports around 70% of the oil that it consumes, Indian oil companies are increasingly looking overseas to acquire stakes in oil assets.
As per a leading business daily, Bajaj Auto expects production of 4.5 m bikes and three wheelers in FY12 and has put in place a plan to take this to 10 m over the next three years. Indeed, the company's key brands, 'Pulsar' and 'Discover' have played a key role in bolstering its fortunes. While these brands will continue to form an important part of the company's growth strategy, plans on the anvil also include coming up with a slew of launches. More importantly, the company intends to keep its focus on profits intact going forward. Indeed, the company has been way ahead of its peers such as Hero Motocorp and TVS Motors on the profitability front over the past years. Bajaj Auto's fixed costs only account for 5% of the overall structure, while variable costs (materials, tools, consumables) account for over 70%. This small fixed cost component ensures that even a sharp slowdown will affect operating margins only marginally. The stock closed higher today.