Sensex Ends Day in Green; Capital Goods Stocks Lead Gains

After opening the day in red, share markets in India witnessed volatile trading activity throughout the day and ended the day in above the dotted line. Sectoral indices traded mixed, with stocks in the auto sector and stocks in the realty sector, leading the gains.

At the closing bell, the BSE Sensex stood higher by 277 points (up 0.8%) and the NSE Nifty closed up by 80 points (up 0.7%). The BSE Mid Cap index ended the day up 1.2%, while the BSE Small Cap index ended the day up by 1.5%.

The rupee was trading at Rs 68.78 against the US$ in the afternoon session. Oil prices were trading at US$ 77.79 at the time of writing.

Asian stock markets too finished in green. As of the most recent closing prices, the Hang Seng was up by 1.3% and the Shanghai Composite was up by 2.5%. The Nikkei 225 was up by 1.1%. Meanwhile, European markets, were trading on a positive note. The FTSE 100 was up by 0.4%. The DAX, was up by 0.3% while the CAC 40 was up by 0.6%

In news from stocks in the chemicals sector. UPL share price was in focus today after it was reported that the company is close to making a new acquisition.

According to a leading financial daily, UPL is close to buying the farm pesticides business of investor Bill Ackman's Platform Specialty Products Corp.-known as Arysta LifeScience-for more than US$4 billion.

This deal would be one of the largest outbound deals by an Indian company.

The Arysta acquisition will help UPL enhance "its solutions to fit local farming needs" and bring in synergies that can benefit its operations in overseas markets, a third person aware of the matter said. The acquisition will also boost UPL's agrochemical and crop protection business.

Notably, Arysta's farm pesticides business accounted for about half of Platform's US$3.8 billion in sales last year.

If the acquisition goes through, it will make UPL the world's fifth largest crop protection company and the largest generic player with combined revenues of slightly lower than US$4.6 billion.

Notably, UPL is currently the ninth largest with annual revenues of $2.7 billion.

Moving on to news from stocks in the auto sector. Tata Motors share price was in focus today as the company's subsidiary Jaguar Land Rover (JLR) reported dull growth in vehicle sales for June.

JLR reported a mere 0.9% growth in global sales for June at 52,049 units as compared to 51,591 units in the same month last year.

Sales of Jaguar brand of vehicles in June were at 16,328 units, a growth of 6.4%. While, Land Rover range sales declined by 1.5% to 35,721 units in June 2018.

Land Rover sales declined slightly in June as China waited for the welcome reduction in import tariffs as of July. This was largely offset by increases in sales in the UK, the US and the company's overseas region.

Auto Volumes are a Good Indicator of Economic Growth

Note that auto sales are one of the major indicators for growth in the Indian economy.

For the first nine months of FY18 at least, the auto industry has done well to grow in double digits after some lean years.

Vehicle sales grew by 11.3% YoY during this period. The best performing of the lot were commercial vehicles (CVs), volumes of which grew by 15% YoY. Two-wheelers also did well growing by around 12% YoY.

Tata Motors share price ended the day up 1.3%.