Late buying fuels Indian indices

Mon, 17 Jun Closing

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Indian equity markets began the day's proceedings on a cautious note and the morning saw them oscillate to either side of Friday's close. However, buying activity picked up in the afternoon session to push the indices firmly into the green. The momentum continued in the final trading hour as well and the indices closed well above the dotted line. While the BSE-Sensex today closed higher by 148 points, the NSE-Nifty closed higher by 42 points. Both the BSE Mid Cap index and the BSE Small Cap index closed marginally into the positive. Gains were largely seen in auto and IT stocks.

As regards global markets, most Asian indices closed in the green today while European indices have also opened firm. The rupee was trading at Rs 57.60 to the dollar at the time of writing.

Engineering stocks closed mixed today. While Larsen & Toubro (L&T) and ABB found favour, Voltas and Thermax closed into the red. As per a leading business daily, engineering major L&T is looking to bid for 4 Indian coast guard contracts worth Rs 40 bn. L&T also plans to bid for two landing platform docks that will be awarded by the Indian government. It must be noted that this is part of the company's strategy to expand its defence manufacturing business. In this regard, L&T recently emerged, in consortium, as the lowest bidder for a contract to make army vehicles. Not just that, the Indian government also aims to fuel growth of Indian defence companies. And so it has come out with a new procurement programme which is likely to favour domestic firms. It must be noted that for FY13, L&T's order inflow stood at Rs 880 bn, a growth of 25% YoY. The total order book at the end of the year stood at Rs 1,536 bn. 49% of the backlog belonged to the infrastructure sector while 28% belonged to the power sector.

As per a leading business daily, Ranbaxy intends to grow revenues from its US business by launching more generic products in that market. The company intends to follow a differentiated strategy, large part of which involves launching Para IV products or those on which it is first-to-file (FTF). Ranbaxy was the first company to launch generic Lipitor in the US market after Pfizer's patent expired in 2011 and enjoyed marketing exclusivity for the first six months. It is estimated to have generated sales of US$ 600 m during its exclusive marketing period. Having said that, the company has also been bogged down by issues with the US FDA wherein it failed to comply with good manufacturing practices. This also delayed the launch of some other drugs on which it had the FTF status. What is more, recently the company pleaded guilty to felony charges for manufacturing norms violation and is required to pay US$ 500 million to the authorities. The stock closed lower today.