Indian Markets Tuesday Wrap-Up: Downward Journey Continues

The Indian markets continued their downward journey as selling activity persisted till the final minutes of trade. The BSE-Sensex ended lower by around 290 points, while the NSE-Nifty closed lower by about 100 points. Stocks from the mid-cap and small-cap spaces ended the day on a weak note as well, recording losses of 2.9% and 2.5% respectively. Selling activity was witnessed in stocks across the board today, with the pack led by stocks from the realty, metal and capital goods sectors.

Other Asian markets ended the day on a mixed note today. The European indices are currently trading in the red. Rupee was trading at 47.99 against the US dollar at the time of writing.

Cement stocks ended the day on a weak note led by India Cements and Ultratech Cement. India Cements announced its results yesterday. The company reported a 10% YoY growth in topline, which was mainly on account of improved realisations. However, the company’s operating profits declined by about 9% YoY. This was due to higher overall cost of operations. Further, the company reported an 18% YoY decline in profits before tax. This further drop in profits was on account of higher depreciation costs. Net profits for the year fell by 32% YoY. It may be noted that the company was impacted by an extraordinary loss during the year. On excluding the same, net profits fell by 24% YoY.

Pharma stocks ended the day on a weak note led by Wockhardt and Ranbaxy (RBXLF.PK). As per a leading business daily, biotech major Biocon has signed an agreement with Mylan (MYL) to develop, manufacture and market generic biologic drugs. As part of the agreement, both the companies will share development, capital and certain costs to market products in various markets such as the US, Canada, Japan, Australia, New Zealand, the EU amongst others. US-based Mylan is the third largest global generics pharmaceutical company having revenues of about US$ 5 bn. However, financial details of this agreement have not yet been disclosed. This will be a positive development for Biocon as it would enable it to benefit from its partner’s regulatory and marketing capabilities to strengthen its presence in the biotechnology space.

According to global IT research firm, Forrester, the amount spent on information technology is likely to reduce by about 11% YoY during 2009. It may be noted that the firm had earlier projected a fall of 3% YoY. The firm has done so mainly due to the large declines in IT investments during the first quarter of 2009. In addition, the research firm has also estimated the spending on software and IT consulting & outsourcing services to drop by about 8% each. This goes in tandem with the actual situation faced by the Indian IT companies. Their pricing has come under pressure as all clients are cutting on discretionary IT spending. On the positive side, future growth will be propelled by increased focus on outsourcing as it is the best alternative to cut costs and yet achieve better operational efficiency. Industry veterans are expecting recovery by the end of this year.

Comments

[pelicanpete:]

This report is a day late - and so a dollar short.

Why bother if the info is so outdated?

Thanks for trying though.

Jul 01 08:27 AM