Sustained selling activity across index heavyweights throughout the trading session today ensured that Indian indices closed deep into the red. After opening in the negative in the early hours of trade, the indices steadily lost ground and kept racking up losses as the day progressed. While the BSE Sensex closed lower by around 373 points (down 2%), the NSE Nifty lost around 115 points (down 2%). The BSE Midcap and the BSE Smallcap also lost around 1% each. Losses were largely seen in IT and auto stocks.
As regards global markets, Asian indices closed mixed today while European indices have also opened on a mixed note. The rupee was trading at Rs 44.06 to the dollar at the time of writing.
Auto stocks closed weak today and the key losers here included Tata Motors, Hero Honda and M&M. As per a leading business daily, Tata Motors saw a strong growth in global sales in September. Sales rose by 19% on the back of robust demand for both commercial and passenger vehicles. Luxury brands such as Jaguar and Land Rover also did very well during the month. While sales of luxury sedan Jaguar grew by 10% to 4,861 units, Land Rover sales were higher by 19% at 14,667 units. Meanwhile, total passenger vehicle sales witnessed a growth of 21% YoY during the month, while sales of commercial vehicles stood at 18%. It must be noted that Tata Motors did very well in 1QFY11 wherein consolidated sales grew by a robust 64% YoY on the back of higher volumes and realisations. Operating margins on a consolidated basis had also jumped from 3.6% in 1QFY10 to as much as 14.6% in 1QFY11.
As per a leading business daily, Piramal Healthcare expects revenues to fall by Rs 12-13 bn in FY11. This is not surprising given that the company has sold its domestic formulations business (nearly 50% of its total sales) to Abbott Laboratories for US$ 3.72 bn. Therefore, in FY11, sales of the hived off business will be reflected in the numbers for only 5 months. It must be noted that with the proceeds from the sale Piramal Healthcare intends to repay debt, pay capital gains tax and reward shareholders in the form of a special dividend. The management has also indicated its intention to venture into areas beyond healthcare although the exact details of the same have not been divulged. The stock closed lower today.