Indian Markets Monday Wrap-Up: IIP Numbers Fail to Cheer

The Indian markets began the day in the red on the back of negative cues from their Asian peers. Thereafter, the benchmark indices languished below the dotted line as the negative sentiment endured throughout the trading session. The Sensex closed lower by around 300 points, while the Nifty closed lower by about 100 points. Stocks from the mid-cap and small-cap indices too ended the day in the red. The metal and realty sectors lead the fall of the indices today. The rupee closed at 48.75 against the US dollar. Most Asian and European markets too ended the day on a negative note.

Dabur India’s wholly owned retail subsidiary, H&B Stores, has launched a new beauty, health & wellness retail store in Delhi under the ‘new u’ brand. The outlet will offer over 6,000 SKUs of international and national beauty & health brands. It has opened 7 stores as of now and plans to open 5 to 6 more during FY09. The company’s retail venture has reported losses to the tune of Rs 102 m during H1FY09. It expects to have losses of around Rs 320 m for the next 2 years after which it seeks to breakeven in FY11. It plans to invest a total of Rs 1.4 bn as equity in H&B Stores to establish a pan India presence. The stock of Dabur India closed higher today.

As per a leading business daily, ONGC’s overseas subsidiary OVL is likely to pick up a 30% to 40% interest in the Satpayev oil field in Kazakhstan. OVL is expected to sign an agreement during the visit of Kazakhstan president to India this month. It may be noted that OVL has been negotiating with Kazakhstan for this asset for the past three years. This is in line with the ONGC’s strategy to aggressively buy oil and gas reserves abroad. It may be noted that the company receives full support of the Indian government’s diplomatic channels towards this objective. The stock of ONGC closed in the red today.

Index of Industrial Production (IIP) for the month of November shows a growth of 2.4% in industrial activity. After a negative 0.3% contraction in October, this number for November has turned out to be higher than expected. A lower base effect in the corresponding month last year and signs of recovery in industrial activity in the second half of November have contributed to the fall. Manufacturing, which accounts for nearly 80% of the index showed a YoY growth of 2.4% in November.