Indian Markets Friday Wrap-Up: In Line with Asian Peers

Includes: EPI, IFN, IIF
by: Equitymaster

The Indian markets witnessed a choppy trading session today as alternate bouts of buying and selling activity led the indices to move around in a volatile manner. However, during the final hour of trade, persistent buying activity led the Indian markets to rise above the dotted line and end the day with marginal gains. The BSE-Sensex closed higher by around 45 points, while the NSE-Nifty closed higher by about 25 points. Stocks from the mid-cap and small-cap space ended the day in the green as well. Buying activity was witnessed in stocks across sectors led by the stocks from the metals and healthcare space. However, stocks from the software and energy sector bore the brunt of profit booking.

Most other Asian markets closed on a mixed note. The European indices are currently trading mixed as well. Rupee was trading at 50.22 against the US dollar at the time of writing.

PSU power equipment maker BHEL has bagged a Rs 3.5 bn contract from Nuclear Power Corporation (NPCIL) to manufacture four steam generators for the latter’s power project in Gujarat. This is the company’s first-ever order for manufacturing 700MWe (megawatt electric) nuclear steam generators. It may be noted that to date, BHEL has designed, installed and commissioned nearly 80% of NPCIL’s 4,120 MW installed capacity. Nuclear power equipment segment contributes marginally to BHEL’s overall revenues and the company is looking at strengthening its presence going forward.

Power stocks ended the day on a mixed note. While Torrent Power and GIPCL ended firm, Reliance Infrastructure ended in the red. As per a leading business daily, Reliance Infrastructure is likely to foray into the IT vertical to implement automation systems for state-owned distribution utilities. It is believed that the company has been shortlisted by Power Finance Corporation to provide such IT implementation services. The company has been shortlisted in different roles like system integrator, meter reading provider, GIS and network service provider for state electricity boards (SEBs). This is a positive development for Reliance Infrastructure as it will help it move into a new business vertical. It may be noted that SEBs have lined up investments to the tune of Rs 100 bn to implement IT automation systems in order to reduce their aggregate technical and commercial losses.

As per a leading business daily, public sector oil companies have drawn out a plan to spend nearly Rs 570 bn in FY10 to expand supplies and build new transportation networks for oil and gas. It is believed that the government will contribute a marginal amount of Rs 250 m to these investments. As such, the balance will be invested by nearly thirteen PSU oil companies. This is a positive development for companies whose business is largely dependent on investments made by the oil and gas sector. On the back of this news, stocks of Punj Lloyd, Welspun Gujarat and KSB Pumps ended the day on a strong note.