Markets back at the neutral zone

Wed, 10 Mar 01:30 pm

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   Pre-Open   

   09:30 am   

   11:30 am   

   Closing   

Although trading in the positive territory, the Indian markets shed a portion of their gains during the previous two hours of trade. The market breadth seems to remain optimistic as the overall advance to decline ratio is poised at 1.3 to 1 on the BSE. While stocks from the metal, capital goods and banking sectors are leading the pack of losers, those from the oil & gas and auto spaces continue to remain the investors’ best picks as of now.

The BSE-Sensex and the NSE-Nifty are currently trading higher by around 40 points and 5 points respectively. Stocks from the midcap and smallcap spaces are trading flat, with the BSE-Midcap marginally down and the BSE-Smallcap marginally higher. The rupee is trading at 45.47 to the US dollar.

Auto stocks are currently trading firm led by Hero Honda, Tata Motors and Ashok Leyland. Times are likely to get tougher for India’s largest passenger car manufacturer Maruti Suzuki going forward as more and more foreign players have been or are planning on launching newer models in the country. The latest entrant is small car launched by Ford, the Figo. The car has been attractively priced at about Rs 3.5 lakhs onwards (petrol version), while its diesel variant is priced at about Rs 4.5 lakhs onwards. The other cars that are likely to hit the markets or that have recently entered the Indian markets this year include Nissan March (priced at about Rs 4 lakh onwards), Volkswagen Polo (approximately Rs 4.3 lakhs), amongst others.

Majority of the new vehicles that are being launched or are expected to be launched this year would be in the small car segment. It must be noted that more than two-thirds of the passenger vehicles sold in India form part of the small car segment. This is precisely the reason for the foreign players to tap this segment of the market. However, one should not ignore that fact that Maruti has been present in India for a long time and as such, has established a strong base in terms of both - showrooms and service centres - around the country. In addition, it also has a strong backing from its Japanese parent, Suzuki Motors.

FMCG stocks are currently trading firm led by Pidilite Industries, HUL and Godrej Consumer Products (GCPL). A leading business daily has reported that FMCG companies such as GCPL and Britannia Industries are planning on increasing prices of their products, which vary from diapers to biscuits. While GCPL is believed to increase prices on the back of the proposed hike in excise duties during the Union Budget 2010-2011, biscuit major Britannia is believed to be hiking prices on higher input costs. GCPL is believed to be hiking prices by about 2% to 10% across products (ranging from diapers to other FMCG products). It must be noted that during the recently announced budget, certain products (including diapers), which fell in the zero excise bracket earlier were brought in the excise duty product category.