Sensex reclaims 17k!

Buying interest gained momentum during the closing hours of the day and as a consequence, indices in the Indian stock market shut shop on a very strong note. Today's strong performance enabled the BSE-Sensex to go past the 17k mark yet again. The index finally settled around 380 points higher than the previous closing. NSE-Nifty too witnessed strong gains in the region of around 120 points (up 2.3%). Although BSE Mid Cap and BSE Small Cap indices also edged higher, the gains were lower than their bigger counterparts and came in at around 1% each. Only two stocks from the Sensex closed the day in the negative.

The rupee was trading at Rs 47.9 to the dollar at the time of writing. While most Asian indices closed higher today, Europe too is witnessing a positive trend currently.

Exports dependant large caps like Reliance Industries and tech stocks as well as banking stocks were the leaders of today's rally. With rupee depreciating to much as Rs 47.9 to the dollar, expectations of higher profits for companies that earn a significant part of their revenues in US dollars seemed to have driven these stocks higher today. As for , the catalyst for them seemingly came from a statement by the RBI Deputy Governor that the interest rate cycle in India is nearing its peak and should reverse by the end of this year. These examples go to show how reversion to the mean is the iron rule of financial markets and hence, selling based on some near term negative development is not the way to go for a long term investor. For all things, no matter how bad, do come to an end.

BGR Energy Ltd, one of India's leading Engineering Procurement & Construction firms traded strong on the bourses today and closed higher by more than 1%. Besides overall market sentiment, the optimism behind the counter also seemed a result of reports doing the rounds that the firm is about to close a deal for entering into the solar power industry with a Germany based firm. The German firm, known as Flagsol, is the subsidiary of Solar Millennium, also Germany based. The deal involves a JV where BGR will hold a 60% stake. It should be noted that the JV is looking to set up a 50 MW concentrated solar power plant in Rajasthan. The plant of that size would call for an investment of about Rs 6.5 bn. This news comes close on the heels of another positive development whereby BGR emerged as the lowest bidder in the tender called by NTPC for supply of nine units of 800 MW steam turbine and generator units for a value of about Rs 35 bn.

Another scrip that closed in the positive territory was that of watch and jewelry maker Titan Industries. The stock ended 2% higher, buoyed by the overall positive sentiment and also on the back of news that the firm is planning to open 2 to 3 new Goldplus stores this year which will take the overall number to 31/32 this year. The company normally adds 12 stores for premium jewellery brand Tanishq and 40 stores for the World of Titan showroom. It is aiming to record revenues to the tune of Rs 90 bn for the current fiscal. For the forthcoming festive season, Titan is aiming for a 25%-30 sales growth.

Indian stock markets extend gains
01:30 pm

The Indian stock market extended gains on account of buying interest in heavyweights. Except for Public Sector Units (PSU), all other sectoral indices are trading firm. Stocks from the software, consumer durables, metal and banking space are leading the pack of gainers.

The BSE-Sensex is trading up by 209 points while NSE-Nifty is trading 67 points above yesterday's closing. The BSE Mid Cap and BSE Small Cap indices are trading up by 0.6% and 0.8% respectively. The rupee is trading at 48.10 to the US dollar.

Most of the Software stocks have been trading firm with Wipro, HCL Technologies, Infosys and Tata Consultancy Services (TCS) leading the pack of gainers. However, CMC Ltd is trading in the red. As per a leading financial daily, Wipro will scout for a niche player in the healthcare and life-sciences space. As per the company management, the company is aggressively looking at inorganic growth, especially niche providers focused only on health and life-sciences and preferably in the analytics and mobility space. With US carrying out health insurance reforms, 30 million more people will have to be insured and hence this has thrown up a huge opportunity for insurance companies. The preference would be given for a company located in the US but with a base in India, with an established book of business in the payer and provider segments, specifically in the revenue cycle management processes. Besides, the company also plans to hire about 200 more domain experts, especially those in the analytics and mobility space, by the year-end.

Most of the Power stocks have been trading in the green as well with Gujarat Industries Power, Reliance Power, Reliance Infrastructure and GVK Power leading the pack of gainers. However, Coal India and National Hydroelectric Power Corp. (NHPC Ltd) are trading weak. As per a leading financial daily, Power Grid Corporation of India (PCGIL) has been granted approval for two investment proposals. The first one is for common system associated with Coastal Energen and Ind-Barath Power (Madras) Long Term Open Access (LTOA) Generation Projects in Tuticorin area (Part-B) at an estimated cost of Rs 19.4 bn, with commissioning schedule of 3 years from the date of investment approval. The second approval is for Power Grid sub-station works associated with transmission scheme for enabling import of power at an estimated cost of Rs 804 m, with commissioning schedule of 18 months from the date of investment approval. The stock of the company is trading in the green.

Indian stock markets trade firm
11:30 am

Indian stock market indices continued to trade strong over the last two hours of trade on the back od sustained buying activity across index heavyweights. All sectoral indices are trading in the green except for Capital goods. IT and Technology stocks are seeing maximum buying interest.

The BSE-Sensex is up by 163 points and NSE-Nifty is up by 52 points at the moment. BSE Mid Cap and BSE Small Cap indices are up by 0.53% and 0.79% respectively. The rupee is trading at 48.19 to the US dollar.

Engineering stocks are trading weak led by Elgi Equipments and Cummins India. As per a leading financial daily, Siemens has signed a deal with Reliance Industries to jointly develop security solutions for homes. RIL's subsidiary Reliance Security Solutions signed a Memorandum of Understanding (MoU) to devise such solutions for safe, secure and smart cities and highways in India. The market for security solutions in India is said to be growing at a substantial rate. It may be noted that terrorist activities have made such intelligent security systems a necessity. RIL and Siemens aim to come together to provide video security solutions. Siemens Building Technoogies, a division of Siemens produces "Siveillance", an advanced security system. It provides security for infrastructure, cities and the people living in these.

Energy stocks are trading firm except for Oil and Natural Gas Corporation Ltd. (ONGC) and Oil India. According to a leading financial daily, Bharat Petroleum Corporation Ltd. (BPCL), India's second largest oil marketing company, is planning to enter the pharmaceutical segment in order to diversify its business portfolio. The company will make an investment of Rs 400 bn over the next five years which involves not only strengthening its existing business like expansion of refining business, but also diversifying into newer areas such as pharmaceuticals. They are also planning to set up a pharmaceutical complex with an investment of Rs 50 bn over the next five years to focus on those products which are currently being imported. The company is also currently in talks with several foreign players who might be interested in sharing technology with it and also pick up equity stake in the project.

IT stocks boost the markets
09:30 am

Asian stock markets have opened the day on a mixed note. Stock markets in Honk Kong (down 0.1%), Indonesia (down 1.3%) and Japan (down 1.4%) are in the red while China (up 0.4%) and Singapore (up 0.1%) are in the green. The Indian stock markets have opened the day on a firm note. Stocks in the Consumer Durables and Information Technology (IT) space are leading the gains while stocks in Oil & Gas are trading in the red.

The BSE-Sensex is trading higher by 100 points (0.6%) and the NSE-Nifty is higher by around 33 points (0.6%). Mid cap and small cap stocks are trading in the green, with the BSE Mid Cap and BSE Small Cap indices up by 0.4% and 0.3% respectively. The rupee is trading at 48.1 to the US dollar.

Pharma Stocks have opened the day in the green with Ranbaxy and Cipla in the green. Sun Pharma has announced that the regulatory issues with the US Food and Drug Administration (USFDA) on its Cranbury plant have been resolved completely. However, things are not all hunky dory for the company. Sun Pharma has also lost a patent dispute with French drug-maker Sanofi. The dispute was over a patent on colon cancer drug - Eloxatin. The US District Court of New Jersey has ruled against Sun pharma over the resolution of the Eloxatin (oxaliplatin) patent litigation. This will ensure the drugs exclusivity for the US market till August 2012. Eloxatin sales are estimated to be at US$ 350 m for one quarter.

Auto stocks have opened the day on a firm note with Tata Motors and Bajaj Auto in the green. Tata Motor's Jaguar Land Rover (JLR) has announced that it will invest about GBP 355 m (approximately Rs 26.6 bn) on a new engine plant in central England. The UK government, which was keen to support manufacturing in Britain, has promised to provide up to GBP 10 m (approximately Rs 750 m). The plant is expected to create about 750 direct jobs while also supporting several thousand jobs across the UK economy. The luxury carmaker already employs more than 19,000 people in Britain and supports up to 140,000 jobs. Robust demand for JLR cars from emerging economies such as China and Russia has given it a significant boost. According to JLR CEO Ralf Speth, the company will invest about GBP 1.5 bn (approximately Rs 112.5 bn) a year for the next five years on new product developments. As such, expanding the engine range would aid the company to harness the full global potential of the Jaguar and Land Rover brands.

Is industrialization a social evil?

It would not be completely wrong to say that growth and corporate social responsibility are two ends of the same river. More often than not growth (industrialization) comes at the cost of sacrificing environmental obligations. For companies, both profits and costs are material in nature. Thus, in the greed to increase their tangible worth the intangible costs associated with violating social obligations (towards society) are ignored. However, if the repercussions of these ecological imbalances are not taken into consideration our next generation will have to pay a huge price for it.

Nonetheless, off late quite a few companies have started paying heed to this evil by turning eco-friendly. In fact, World Economic Forum (WEF) has identified many companies from emerging markets that are giving due consideration to environmental issues while making any business decisions. And knowing the fact that environmental regulations in emerging markets are not as explicit as compared to the western world the efforts certainly become noteworthy.

Take the case of Shree Cement for example. It may be noted that the company had been facing water shortages for long. Resultantly, it developed the most water-efficient technology in the world for making cement. While here necessity (to save water) was the prime factor behind the invention of the technology (which saves water) there have been many instances where companies have imposed a self-regulation on themselves for environmental protection.

Further, considering that bureaucracy in emerging markets is rigid, so trying to lobby regulators to shape up the environment in one area in order to compensate for the damage undertaken in another becomes all the more difficult.

However, it is really encouraging to see that companies from the emerging world have enlarged their motto from "only profits" to "profits after social costs". Do not forget the fate of companies like Hindustan construction company (HCC) and JSW Steel that tried disrupting ecological balance. While growth and environment both assume equal importance it becomes very difficult to play around with both these ideologies. Corporate's that can balance both will have a big role to play in shaping the future of their respective countries.

While being environmentally active does not make the company successful per se, it does add to the marketability factor. With environment protection being the top most agenda for many countries now the "going green slogan" would certainly help them garner visibility. And this would be beneficial to both - Societies as well as Corporate's.