Volatility mars Indian indices

Mon, 10 Sep Closing

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Indian equity markets began the day's proceedings on a cautious note but alternate bouts of buying and selling in the subsequent hours led the indices to oscillate to either side of Friday's close. Volatility was observed in the final trading hour as well and the indices closed barely above the dotted line. While the Sensex today closed higher by 17 points, the NSE-Nifty today closed higher by 5 points. The BSE Mid Cap and the BSE Small Cap notched gains of 0.3% and 1% respectively. Gains were largely seen in metals and healthcare stocks.

As regards global markets, Asian indices closed mixed today while European indices have also opened mixed. The rupee was trading at Rs 55.38 to the dollar at the time of writing.

Engineering stocks closed mixed today. While BHEL and Thermax were at the receiving end, Larsen & Toubro (L&T) and ABB closed firm. As per a leading business daily, Bharat Heavy Electricals Limited (BHEL) is looking to recruit 5,000 employees for various posts over the next 5 years. In the previous five years, BHEL had hired 15,000 personnel as it undertook a modernisation and expansion drive in three phases across its various plants in the country. It must be noted that in 1QFY13, the company put up a strong performance with sales and net profits growing by 17% YoY and 13% YoY respectively. Going forward, management expects 10,000 to 15,000 MW of order tendering in the market as a whole. As far as the overall market situation is concerned, neither the pricing trends nor the order finalizations have shown any significant improvements. However, the recent levy of import duty is expected to benefit the local manufacturers in the long run. Lastly, though client advances have not fallen dramatically, managing working capital will prove to be a challenge for the company due to significant delays witnessed in project finalizations.

As per a leading business daily, Bosch Ltd has been compelled to suspend production for a few days at some of its plants due to the prolonged slowdown in the auto industry The rationale has been to meet the demand for products and to avoid unnecessary build-up of inventory. The heavy commercial vehicles as well as the tractor segments have been the worst performers in the auto industry for the year so far. These segments are the most cyclical of the lot as the demand for them depends a lot on how the industrial, agricultural and construction sectors perform. Short term headwinds are expected to persist in the form of firm interest rates, fuel prices and depreciation of the rupee. As a result, Bosch Ltd is looking to weather this storm by improving operational efficiency, controlling costs and intensifying sales activities. The stock closed lower today.