Sensex Ends Flat; Tata Motors & ONGC Top Gainers
Indian share markets continued to trade dull in the afternoon session. At the closing bell, the BSE Sensex remained unchanged. While, the NSE Nifty finished higher by 7 points. Meanwhile, the S&P BSE Midcap Index and S&P BSE Small Cap Index both ended down by 0.6% respectively.
Barring metal stocks, power stocks and automobile stocks, all the stocks ended the day in red. Stocks from realty sector and healthcare sector witnesses maximum selling pressure.
Overseas, Asian stock markets finished mixed as of the most recent closing prices. The Hang Seng gained 1.99% and the Shanghai Composite rose 1.24%. European markets are lower today with shares in Germany off the most. The DAX is down 0.71% while France's CAC 40 is off 0.43% and London's FTSE 100 is lower by 0.30%.
The rupee was trading at Rs 63.67 against the US$ in the afternoon session.
Tata Motors share price surged over 3% after its domestic commercial vehicle and passenger vehicle sales rose 52% to 54,627 units in December. Domestic commercial vehicle sales increased 62% to 40,447 units.
Meanwhile, Ashok Leyland has reported a 79.4% jump in total sales at 19,253 units in December 2017. The company had sold 10,731 units in the same month last year. The stock price surged 3.6% today.
In the news from the economy. Extending the trend of growth, manufacturing activity in India accelerated at a swift pace in the month of December to hit 5 year high. This came on the back of improved operating conditions and strong production.
The substantial inflow of new orders too underpinned the expansion in manufacturing sector. However, Goods and Services Tax (GST) continued to exert upward pressure on manufacturers' cost burdens in December.
Reportedly, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI)-a composite single-figure indicator of manufacturing performance- rose to 54.7 in December from 52.6 in November, indicating a healthy growth in manufacturing sector since December 2012.
The reading signaled an expansion for the fifth consecutive month, remaining above the no-change mark of 50.
On the price front, rising input costs continued to spark cost pressures on manufacturers and to pass on their cost burdens, firms raised output charges for the fifth month in succession. Further, the inflation rate rose to a 10-month high, but was modest and weaker than its long-run series average.
In line with improved manufacturing activity, the employment growth also accelerated to the strongest since August 2012. This came on the back of favorable demand conditions in domestic and international markets.
Tackling unemployment has remained one of the biggest economic challenges for successive governments. So, while the Modi-led government has unveiled a number of breakthrough reforms such as notebandi, GST and the Insolvency and Bankruptcy Act, poor growth in job creation remains its biggest sore point.
New Jobs Grow at a Snail's Pace
As per the latest quarterly report by the Labour Ministry, new jobs in the organized sector grew by a measly 2% amounting to 0.42 million in FY17. And, out of the 0.4 million jobs created in FY17, a lion's share of 47.4% were in the manufacturing sector.
In the news from the engineering sector. As per an article in a leading financial daily, Larsen & Toubro's (L&T) construction arm - L&T Construction has bagged orders worth Rs 14.5 billion across various business segments.
The Smart World & Communications Business Unit has secured an order worth Rs 8.6 billion for the implementation of 5 Million Smart Meters.
Reportedly, the scope involves Design, SITC and O&M Support of Advanced Metering Infrastructure (AMI) Solutions for 5-Million Smart Electricity Meters with GPRS-based communication modules for the states of Uttar Pradesh and Haryana.
Further, its Power Transmission & Distribution Business has bagged orders worth Rs 5.7 billion from both international and domestic customers.
The business has secured an order from Chamundeshwari Electricity Supply Corporation, a Karnataka Government undertaking, for turnkey execution of power distribution system to strengthen works in several subdivisions of the Mysuru area.
Notably, diversification continues to help L&T negotiate and get better terms and margins for projects. Apparently, this is because it is less desperate to win orders as compared to a company which are present in only a couple of sectors. Its reputation, extensive technical prowess, and large skilled workforce have enabled L&T to command a certain premium from customers and vendors alike.
Whether further addition to these new projects provides a cushion to its profitability will be an interesting thing to watch out for going forward.
To know more about the company, you can access to L&T's latest result analysis and L&T stock analysis on our website.
L&T share price ended down by 1%.
And here's a note from Profit Hunter:
The Oil and gas sector is witnessing selling pressure today. The oil marketing companies (OMCs) are leading the fall - BPCL (-2%), HPCL (-2%), and IOC (-1%).
BPCL has been trading in a rising channel line since July 2016. It made a lifetime high of 546 in September 2017 and slipped to a low of 449, where it found support from the channel's support line. It resumed its upward momentum, but found resistance from a life high near the 550 level.
Last month, the stock again found resistance from this level and slipped lower.
Now the stock is trading near its channel's support line. But this time, it did not cross above its previous high, indicating weakness in the uptrend.
So will the stock find support from the channel lower band or will it settle below it, given the weakness in price action?
BPCL Trades in Rising Channel
Disclaimer: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. ...
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