Indian stock market indices began on a strong note and maintained this momentum throughout the trading session yesterday. Sustained buying activity across heavyweights ensured that the markets closed well into the positive.
While the BSE-Sensex closed higher by around 169 points (up 1%), the NSE-Nifty closed higher by around 51 points (up 1%). The BSE Midcap and BSE Small Cap also closed higher by 2% each. Gains were largely seen in consumer durables, banking and auto stocks.
As regards global markets, Asian indices closed firm yesterday while European indices also opened on a strong note. The rupee was trading at Rs 44.77 to the dollar at the time of writing.
Engineering stocks closed mixed yesterday. While Voltas and Thermax found favour, BHEL and Siemens (SI) were at the receiving end. As per a leading business daily, engineering major BHEL has secured an order of Rs 54.5 bn from a Bajaj group company for supplying power equipment. This is for setting up the 1,980 MW thermal power project at Lalitpur in Uttar Pradesh. The company has bagged the main plant package contract for three coal-fired thermal units of 660 MW each with supercritical parameters. BHEL is already executing five such major contracts for various power projects in the country. The company is looking to deliver 15,000 MW of power equipment per annum.
Overall, the company is sitting on a healthy order book of Rs 1,580 bn at the end of 3QFY11 and the management is optimistic of achieving the full year order inflow target of Rs 600 bn considering an uptick in capex cycle. However, execution issues and a slow power reform process due to tardy government policies continue to pose some risks.
Pharma stocks closed firm yesterday and the key gainers here were Cipla, Dr. Reddy's (NYSE:RDY) and Glenmark. As per a leading business daily, Dr. Reddy's has acquired GSK Plc's US penicillin manufacturing facility and the rights to the brands 'Augmentin' and 'Amoxil'. The sum has not been disclosed. GSK will retain the existing rights of these brands outside the US. This is a positive for Dr. Reddy's and besides enhancing its revenues from the highly competitive US generics market, will also help it establish a branded portfolio. The latter especially has the potential to deliver higher revenues and profits.
It must be noted that the US market is expected to be the key growth propeller for Dr. Reddy's going forward as it unveils a slew of products. The fact that drugs worth billions are set to lose patents is an advantage and Dr. Reddy's intends to focus on niche products having limited competition.