Indian stock markets were buoyant throughout the trading session today on the back of sustained buying activity across heavyweights. The indices began on a positive note and while trading was rangebound for the larger part of the day, buying surged in the later hours and led the indices to close well above the dotted line. While the BSE-Sensex closed higher by around 510 points (up 3%), the NSE-Nifty closed higher by around 149 points (up 3%). The BSE Mid Cap and the BSE Small Cap also did well to notch gains of 1% each. Gains were largely seen in banking
, oil and gas and consumer durables stocks.
As regards global markets, Asian indices closed firm today while the European indices have also opened in the green. The rupee was trading at Rs 52.53 to the dollar at the time of writing.
As per a leading business daily, engineering major Larsen & Toubro (L&T) has bagged a US$ 189 m contract from Abu Dhabi Gas Industries (GASCO) for engineering, procurement, construction and commissioning of the new Habshan-Ruwais-Shuweihat gas pipeline. GASCO is implementing the pipeline on behalf of Abu Dhabi National Oil Company (ADNOC). The pipeline will supply natural gas to Takreer's new refinery expansion project and Abu Dhabi's Water and Electricity Authority (ADWEA) in Shuweihat. The project is scheduled to be completed by September 2013. L&T has awarded the line pipe supply contract to a local Abu Dhabi vendor and intends to hire a significant number of construction labourers and equipment locally to meet the large-scale project demands. This is a positive for the company and will add on to its order book. That said, the management expects the order inflows to increase by 5% YoY against the earlier growth guidance of 15% YoY for the current fiscal. In addition, the management has also indicated further margin erosion in Engineering & Construction (E&C) segment due to raw material price inflation. Hence the next few quarters are likely to be challenging for the company. The stock closed higher today.
Most pharma stocks closed firm today with the key gainers being Biocon, Ranbaxy and Piramal Healthcare. As per a leading business daily, Ranbaxy has signed a consent decree with the US Food and Drug Administration (US FDA) in return for allowing the company to resume normal operations in the US market. Further, the company intends to make a provision of US$ 500 m in connection with the investigation by the US Department of Justice, which is expected to be sufficient to resolve all potential civil and criminal liability. It must be noted that the US FDA had imposed a ban in 2008 on 30 drugs being manufactured by the company at its plant in Paonta Sahib and Dewas. This had significantly impacted Ranbaxy's sales in the US market. As a result of this ban, the company was unable to launch certain first-to-file (FTF) products in the US and there was considerable uncertainty with respect to some other products as well. In that sense, this development is positive for the company and should lead to better revenue visibility from the highly competitive US generics market.