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Indian equity markets started the day on a positive note and continued this trend throughout the day on the back of persistent buying activity coupled with firm global cues. While the BSE-Sensex closed higher by 473 points, the NSE-Nifty closed higher by 146 points. S&P BSE Midcap and S&P BSE Smallcap also closed on a strong note with the indices up by 1.9% and 2.3% respectively. Gains were largely seen in metal and auto stocks.
Asian markets closed sharply higher today with shares in Japan leading the region. The Nikkei 225 is up 5.88% while Hong Kong's Hang Seng is up 2.90% and China's Shanghai Composite is up 1.25%. European markets are sharply higher today with shares in France leading the region. The CAC 40 is up 2.68% while Germany's DAX is up 2.27% and London's FTSE 100 is up 2.17%. The rupee was trading at 67.75 against the US$ in the afternoon session.
Mahindra & Mahindra's (M&M) research center in Detroit, the Mahindra North American Technical Center, has reportedly made it past the first round of the US Postal Service's bidding process for a contract to supply 1.80 lakh vehicles. The contract is estimated at US$5 billion.
The center, M&M's first technical one in the US, is up against a dozen companies, including many automobile majors, defense contractors and electric vehicle start-ups, for the contract to make the next-generation vehicles for the postal service. According to company's marketing head, M&M's experience in right-hand-drive vehicles, in both two and four-wheel drive configurations, gives the company a competitive edge.
2015 has been a year of mixed fortunes for the Indian automobile industry. After a long period of slowdown, automobile companies were showing some signs of recovery during the festive season, supported by new launches and a double digit growth in the Utility Vehicle (UV) segment. However, the trend came to an unexpected standstill in the previous month as the Supreme Court banned the registration of diesel cars (Subscription Required) with an engine capacity of over 2000 cubic centimeters (cc) from January to March 2016. Post the ruling, the stock prices of automakers with a substantial share of luxury and diesel vehicles in their product portfolio have taken a hit. One of the worst hit has been Mahindra & Mahindra, with diesel based utility vehicles (UVs) forming a majority of product portfolio.
According to a leading financial daily, Oil and Natural Gas Corporation's (ONGC) overseas arm, ONGC Videsh (OVL) has signed a memorandum of understanding (MoU) with the Republic of Equatorial Guinea to cooperate in the hydrocarbon sector in the African country. The MoU provides the basis for a comprehensive cooperation in multiple areas of the energy sector, including offshore oil and gas exploration in Equatorial Guinea plus midstream and downstream projects. The MoU is considered the foundation for future discussions that will take place in the coming weeks between the both parties to reach further agreements.
In other news, Sudan has offered ONGC Videsh three more oil and gas blocks for exploration and production and invited Indian oil companies to set up a coastal refinery to boost fuel supplies to the African continent. OVL already has a 25% stake in Greater Nile Oil Project (GNOP) in Sudan that produces about 50,000 barrels of oil per day.
ONGC is India's largest government-run corporation and produces about 70% of India's crude oil and natural gas. The corporation is the biggest public sector commercial organization in India with current market capitalization of about US$ 31 billion. The Indian government holds a 68.94% stake in ONGC. As oil prices have dropped below US$ 30 per barrel, the global oil exploration and production companies are struggling to make profits. However, ONGC's net crude oil realizations have in fact surged amid falling oil prices (Subscription Required). Deregulation of diesel prices, along with the direct benefit transfer scheme for LPG has been a major relief for the company.
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