Realty takes the punch

Profit booking at higher levels led the indices to lose further ground during the final hour of trade. The BSE-Sensex ended the day with losses of around 180 points, while the NSE-Nifty closed lower by about 35 points. Stocks from the mid-cap and small-cap space ended the day on a weak note, lower by 1% and 0.2% respectively. Selling activity was witnessed in stocks across sectors, led by realty and banking. Power stocks, however, ended the day marginally in the green.
Most of the other Asian markets ended the day on a firm note. The European indices are currently trading firm as well. Rupee was trading at 50.6 against the US dollar at the time of writing.
As per a leading business daily, L&T plans to set up three more operating companies in the defense, aerospace and nuclear power businesses. The company plans to create these companies over the next three to four years. As of now, these businesses fall under the company’s heavy engineering division, which focuses on manufacturing and supplying the critical equipment and systems to core sector industries. This move will help the company focus on each business segment separately. For instance, L&T has already made a plan to invest Rs 2 bn in defense and related business alone over the next three years. It may be noted that the company is looking to emerge as a major player in each of these areas and intends to do this by enhancing its expertise either by itself or by joint ventures and collaborations with other companies. The stock of L&T, along with its peers Punj Lloyd and BHEL, ended the day on a weak note.
Auto stocks ended the day on a weak note led by Ashok Leyland, Maruti Suzuki and Tata Motors. As per a leading business daily, M&M has increased its market share in the SUV (sports utility vehicle) segment to nearly 65% (during April) from 47% a year ago. This is on the back of models like Xylo, Bolero and Scorpio, recording strong sales and subsequently taking the top three positions in the SUV segment. As per the management, the demand for vehicles has perked up since October last year and the trend is expected to continue in the coming few months. During the month of April, M&M saw a 16% increase in sales (including joint ventures). In addition, the company’s newly launched SUV, Xylo has also helped boost sales. As per the company, the company has delivered over 10,000 Xylos till date.
The International Monetary Fund (IMF) has downgraded its growth outlook for Asia, predicting a long and severe recession for the region's wealthier but export-reliant economies. It expects growth to slow down to 1.3% this year as compared to initial forecast of 2.7%. For emerging nations in Asia, which excludes Japan, the IMF lowered its growth forecast to 3.3% from 4.4%. It expects China to grow at the rate of 6.5% in 2009 as aggressive policy response is expected to boost domestic demand, while India is forecasted to grow at the rate of 4.5%. According to the agency, the Indian economic growth will slow down as global credit conditions and inadequate investments are likely to arrest the growth of the economy.