Indian mkts extend the rally

Fri, 18 Oct 11:30 am

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After a strong start, the Indian stock markets have continued the uptrend in the last two hours of trade. All sectoral indices are trading positive today led by strong rally in Bankex and Metal.

The BSE-Sensex is trading up 343 points and the NSE-Nifty is trading up 105 points. The BSE Mid Cap index is trading up by 0.9% and BSE Mid Cap index is trading up by 0.7%. The Rupee is trading at 61.0 to the US Dollar.

Engineering stocks are trading mixed today. Everest Kanto Cylinder and Jain Irrigation are leading the gainers; while Alstom T&D and Kalpataru Power are leading the losers. According to a leading business daily, Bharat Heavy Electricals's (BHEL) ancillary units in Ranipet and Tiruchy have been hit due to lack of orders. BHEL has not been giving orders for boilers and auxiliaries to these ancillary units as many of the power projects by its customers have been facing delays on account of coal crisis and lack of funds. BHEL's Heavy Pressure Boiler Plant (HPBP) in Tiruchy is very crucial to BHEL's performance as it contributes approximately 25-30% to the total order book and sales of the company. BHEL itself is getting very few orders for equipments from its customers including the central, state and private sectors. The slowdown in power sector has compelled BHEL to look for other avenues for growing its revenues. As a result, the company has diversified into manufacturing of locomotives and is also eying defence sector. BHEL's order inflow during 1QFY14 was Rs 14.7 bn, while it did not announce receipt of any major orders in 2QFY14.

Most Indian Pharma stocks are trading higher today. Dr. Reddys Labs and Natco Pharma are among the stocks leading the gains. According to a leading business daily, The British Health Regulator MHRA has recalled 5 prescription drugs of Wockhardt after it identified manufacturing defects in those drugs. The defects were identified during a routine inspection of the company's plant in Chikalthana in Maharashtra. The recall of these 5 over the counter drugs would be precautionary in nature, the company has said. The plant in Maharashtra also makes 10 other prescription drugs and their production won't be affected as of now. The MHRA has also confirmed that the recalled drugs posed no safety risk to the health of patients and that they were not contemplating a ban. The company derives combined revenue of about 3 m pounds from these drugs from the UK and EU markets. Wockhardt has said that it is working with the regulator to resolve the issue as soon as possible. Wockhardt is trading up 0.9% today.