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Core sector growth slows to 2.3% in November

New Delhi: The growth of six infrastructure industries slowed to 2.3% in November, the lowest in the current fiscal, mainly due to contraction in production of cement and petroleum refinery products. The sectors-crude oil, petroleum refinery products, coal, electricity, cement and finished steel-had expanded by 5.9% in November last year, reports PTI.

Petroleum refinery output contracted by 3.7% and that for cement was lower by 11.6% in November, according to data announced by the industry ministry today. In November last year, refinery production expanded by 4.8% and cement by 9%.

Coal production also saw sluggish growth of 0.7% this November compared to 4.7% in the month last year. Growth in the finished steel sector too was slow at 4.4% compared to 11.7% in the month last year. However, crude oil production was better at 17%. The sector had contracted by 1.6% in November 2009.

During April-November, the core sector, which contributes about 27% in the Index of Industrial Production (IIP), grew by 5%, against 4.5% in the corresponding period in 2009-10. The growth figure for October has been revised upwards to 8.6% from the earlier 7%.

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Thursday Closing Report: More gains likely

Today was the expiry day for the December series of futures and options and the market began cautiously. Yesterday the market had rallied on thin volumes and expectations were positive especially since the Sensex had gone past the recent short-term high of 20,157.

The Sensex continued Wednesday’s gains. The index hit an intra-day high of 20,410.91 and closed 133.04 points up at 20,389.07 (up 1%). The intra-day high and close is the highest in the past one and half month, suggesting a possible breakout towards a new high. Of the 30 Sensex stocks, 25 stocks were in the positive in the range of 0.06% to 2% while five stocks ended in the negative, with the maximum fall of 1.18% in HDFC Bank.

The S&P CNX Nifty was up 41.50 points (up 0.68%). Among the Nifty 50 stocks, 36 stocks were gainers in the range of 0.03% to 5.99%. Suzlon Energy was the highest gainer (5.99%) on rumours of a possible change in management control. The 14 losing stocks were in the range of 0.23% to 1.45%. The biggest loser was HDFC Bank. Infosys and Hindalco Industries hit  52-week highs of Rs3,447 and Rs244.25 respectively during trading and ended at Rs 3,440.50 and Rs 243.85 respectively. Except for the BSE Oil and Gas Index, all other BSE indices ended in the positive. The maximum gain came in BSE Consumer Durables and BSE IT, 1.32% and 1.04% respectively.
 
All eyes were also on the government to unveil data on some wholesale price indices, that is the food price index, the primary articles index and the fuel price index for the year through 18 December 2010.

Inflation in the food articles group climbed to 14.44% in the week ended 18 December 2010 from 12.13% in the previous week, the latest government data showed. This was the fourth instance of an increase in food inflation after it had eased for seven consecutive weeks. Food inflation surged to a 10-week high for the week ended 18th December as prices of vegetables, particularly onions, fruits and protein-based products, continued to escalate.

However, food inflation is still far below the level of 21.19% seen during the same week last year. Inflation in Primary Articles group jumped to 17.24% in the week under review from 15.35% in the week ended 11 December 2010, the latest data shows. Inflation in the Fuel & Power group inched higher to 11.63% from 10.74%.

In Asian markets, except for KLSE Composite (down 0.36%) and Japan’s Nikkei 225 (down 1.12%) all the Asia-Pacific indices ended positive on growing optimism over global economic growth. The Hang Seng was up 0.13%, Jakarta Composite was up 0.12%, Seoul Composite was up 0.37% while Taiwan Weighted was up 0.47%.

China’s manufacturing activity continued to expand in December, but the pace of growth slowed to a three-month low, according to the outcome of a survey by HSBC, released on Thursday. China’s purchasing managers’ index for December came in at 54.4, above the threshold of 50 that separates expansion from contraction, but below November’s reading of 55.3.

On the domestic front the market regulator has mandated that companies with less than 25% public float will have to raise funds through a public share sale and not through private placement to institutions, a move aimed at widening retail holding and limiting stock price manipulation. FIIs were net buyers of Rs547.58 crore and domestic institutional investors were net sellers of Rs170.34 crore.

In corporate news, Parsvnath Developers Ltd has found a place for the first Cash and Carry store for Carrefour, the world’s second largest retailer, at the Seelampur Metro Mall in New Delhi. The Seelampur mall is the eighth mall the company has completed. Parsvnath gained 4.41%.

Larsen and Toubro has bagged orders worth Rs1,164 crore for its metallurgical and water operating division. This includes a major order from a Tata Steel joint venture worth Rs523 crore for a 6,00,000 tonnes per year (TPY) continuous annealing and processing line for production of high-grade rolled steel sheet. Nippon Steel Engineering is to provide technology and imported line equipment for the project. The project is scheduled to complete in 30 months.

L&T’s water unit has secured orders worth Rs530.84 crore from Tamil Nadu Water Supply and Drainage Board for water supply schemes in Hongenakkal. Funded by Japan International Co-operation Agency, the scope of the work includes supply and laying pipelines with an execution period of 24 months and a maintenance period of 60 months. Another order worth Rs110.60 crore is from Punjab Water Supply & Sewerage Division for development of sewerage network and construction of sewage treatment plant in Hoshiarpur and Jalandhar with a contract period of 12 months. L&T gained 0.85%.

Suven Life Sciences, a biopharmaceutical company, has been granted patent for two of its products for new chemical entities (NCEs) for treatment of disorders associated with neuro-degenerative diseases. These will be valid till 2027. With these new patents, Suven now has a total of 11 granted Indian patents on NCEs. Suven gained 2%.
 

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