While trading for a larger part of the day was volatile due to alternate bouts of buying and selling, strong buying activity in the final trading hours ensured that the indices closed well above the dotted line. While the BSE Sensex closed higher by around 59 points, the NSE Nifty gained around 17 points. Midcap and small cap stocks also closed higher today. Barring IT stocks, gains were seen in stocks across sectors.
As regards global markets, most Asian indices closed firm today while European indices have also opened on a strong note. The rupee was trading at Rs 45.49 to the dollar at the time of writing.
As per a leading business daily, one of the country’s largest steel companies SAIL is in talks with Korean steel major Posco to set up a steel plant near the former’s existing steel making facility at Bokaro in Jharkhand. This will be under the joint venture route. Since Posco has run into difficulties in acquiring land in Orissa, the company has turned to SAIL to form a joint venture. These talks have been initiated as part of the memorandum of understanding (MoU) signed between the two companies in 2007. This was to establish a strategic alliance for cooperating with each other on a wide range of areas such as exchange of manpower, raw material sourcing, marketing cooperation and other areas of mutual interest.
While the talks are still in a very nascent stage, Posco is believed to have proposed a 3 m tonne facility under the JV route with an investment of around Rs 120 bn. While SAIL will be able to leverage on Posco’s technological expertise, for Posco it will be a solution to gain a foothold in India. SAIL, along with its peer Tata Steel closed firm today.
Engineering stocks closed mixed today. While the key gainers here included Blue Star, Suzlon and Voltas, L&T closed in the red. As per a leading business daily, engineering major L&T has bagged a road project worth Rs 14 bn from the National Highway Authority of India (NHAI). The scope of this contract includes build 6-lane highways and these would be operated on a build, operate and design basis. This project is expected to be completed within 30 months.
While this is a positive for L&T and will enable it to enhance sales in the long term, execution is the key. Infact, the company’s overall sales were impacted in 3QFY10 as execution of various projectswent through rough patches during the quarter leading to consequent delays.
As per a leading business daily, Bajaj Auto is looking to achieve sales of 4 m bikes and three-wheelers in FY11. This would represent a 40% growth over FY10. Exports are expected to increase by 100,000 units to 1 m vehicles in the next fiscal. The company is of the view that its ‘twin brand focus’ on the Pulsar and Discover motorcycles would continue next fiscal too given that they have been the key growth drivers over the last three quarters. These two brands have helped the company nearly double its share in the two-wheeler market to over 35% which could touch 40% if the growth momentum continues. The stock closed 1% higher today.