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Realty, Consumer Durables lead the rally
Wed, 16 Mar 01:30 pm

Indian stock market indices continued to rally with stocks from realty, consumer durables and banking leading the gainers. All the sector indices are trading in the green.

The BSE-Sensex is up by 245 points while NSE-Nifty is trading 84 points above yesterday’s closing. Both BSE Midcap and BSE Small cap indices are up by 1.5% and 1.6% respectively. The rupee is trading at 45.20 to the US dollar.

Auto Ancillary stocks are trading firm with Wheels India and Amara Raja batteries leading the gains. Rubber prices have corrected by over 30% from its peak of around Rs 235 per kg (prevailing a week ago). It may be noted that following an earthquake in Japan automakers like ToyotaMotor Corp, HondaMotor Corp and NissanMotor Corp have shut down their auto plants for a few days thereby indirectly reducing the demand for rubber. However, it may be noted that the global rubber prices have been soft since the end of February after China (the largest consumer of natural rubber) witnessed a decline in auto sales. It may be noted that until recently tyre companies were facing a heat on their margins due to increasing rubber prices which account for almost 50% of the overall cost of producing a tyre. This is the right time for the tyre companies like Apollo Tyres, MRF Ltd and CEAT Ltd to accumulate rubber for future consumption. However, if the demand from China and Japan rebounds anytime soon the rubber prices may again witness a steep rise.

Tata Motors now sells more than 5% of the Nanos through the discounted retail chain Big Bazaar. Tata Motors seems to have realized that for a product like Nano, conventional distribution system such as car showrooms will help only to a certain extent. There is a match between the positioning of Nano and the profile of Big Bazaar customers. The prospective Nano buyers are most likely the value conscious consumers and thus a tie-up with the retailer Big Bazaar is expected to provide a significant push to Nano sales. Tata Motors is said to have sold 450 Nanos through Big Bazaar since it began experimenting about a month ago. Tata Motors sells Nanos through its large distribution channel of 874 sales outlets and 1,000 odd kiosks across India.

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