Buying momentum fuels indices

Mon, 14 Jan Closing

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   09:30 am   

   11:30 am   

   01:30 pm   

Indian equity markets traded in the positive throughout the trading session today. The indices began the day's proceedings on a firm note and thereby gained steadily on the back of buying activity across index heavyweights. This momentum was maintained in the final trading hour as well and the indices closed well above the dotted line. While the Sensex today closed higher by 243 points, the NSE-Nifty today closed higher by 73 points. The BSE Mid Cap and the BSE Small Cap also notched gains as they closed higher by 1% each. Gains were largely seen in oil and gas and IT stocks.

As regards global markets, Asian indices closed firm today while European indices have also opened in the green. The rupee was trading at Rs 54.46 to the dollar at the time of writing.

Auto stocks closed mixed today. While Ashok Leyland and Hero Motocorp found favour, M&M closed in the red. As per a leading business daily, Mahindra & Mahindra (M&M) is looking to invest US$ 900 m over the next 4 years to develop three new platforms and six engines in collaboration with its subsidiary Ssangyong Motor Corporation (SMC). This would be funded partly through fresh equity and partly through internal accruals and external commercial borrowings. It must be noted that M&M had acquired 70% stake in Ssangyong Motor in March 2011 for US$ 463 m. One of the reasons for the stake acquisition in SMC was that it would give M&M a fillip in terms of boosting its export volumes as well as diversifying to newer geographies. Another reason was that M&M wanted to bridge its product gap as it did not have a presence in the premium SUV category, something that SMC manufactures. In the domestic market too, in an environment where most of the segments in the auto space are reporting sluggish growth, utility vehicles (UVs) have seen a considerable surge in volumes in FY13 so far.

As per a leading business daily, retail inflation or consumer price inflation (CPI) rose 10.56% in December 2012. In November, this figure stood at 9.9%. While retail inflation in the rural areas was 10.74% during December, it was 10.42% in the urban areas. The Indian economy had slowed down during the last 2 quarters with GDP growth coming in at 5.5%. As a result, there has been tremendous pressure on the Reserve Bank of India (RBI) to cut rates. So far the central bank has been in no mood to oblige as inflation continues to remain above comfort levels. And the latest CPI figures mean that rates could remain at similar levels in the next monetary policy as well.