Showing strength...

Markets have again gained some ground during the previous hour of trade as buying intensified in index heavyweights. Software stocks are in the drivers seat today, led by Wipro (WIPRd.BO, news) , which announced strong numbers. Select banking, energy, FMCG and telecom stocks are witnessing buying action. However, auto and steel stocks have continued their poor run.

The BSE Sensex is trading at 6,347 (up 48 points) and the Nifty is trading at 1,966 (up 18 points). The rupee is trading at Rs 43.73 per US Dollar.

Jindal Stainless announced its quarterly and yearly numbers yesterday. Net profit for 4QFY05 has risen by as much as 239% YoY, driven mainly by a significant improvement in operating margins owing to higher steel prices. Revenues during the quarter rose 24%. The company has signed a MoU with Italy-based Steelway to set up a service centre for its products near Gurgaon in Haryana. The Jindals would hold 80% of this, while Steelway will hold the balance. A robust domestic economy has aided the rise in demand for steel, apart from global factors like the Chinese consumption. This has helped all steel companies to report strong results over the past few quarters. However, due to the cyclical nature of the industry, one would be well advised to practice caution at this stage with regard to steel stocks, as a downturn in the cycle can cause a complete reversal of fortunes for the industry. The stock is trading marginally in the positive.

Dishman Pharmaceuticals has acquired a UK-based company called Synprotec through its UK-based subsidiary, Dishman Europe Ltd. The asset base of Synprotec is 2 m pounds and Dishman has negotiated the cost of acquisition even below this price. Synprotec has contract R&D and manufacturing capabilities in the UK. The order book position for the company is also quite robust with contract research assignments for several molecules for various MNCs. Dishman is a specialist contract research firm. This segment of the pharma industry is expected to grow at a rapid pace going forward, given India's low cost-high skills base. The stock is trading strong, up by as much as 7% today. Pharma major Cipla (2%) and Wockhardt (1%) are both trading strong, while Dr Reddy's (1%) and Ranbaxy (2%) are witnessing selling pressure.

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