Stock Markets Continue Uptrend

Thu, 26 May 01:30 pm

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   Closing   

After opening the day in the green, the Indian indices logged further gains and went on to extend their uptrend in the post-noon trading session. Sectoral indices are trading on a positive note with stocks from the banking, auto and capital goods sectors witnessing maximum buying interest.

The BSE Sensex is trading up 282 points (up 1.1%) and the NSE Nifty is trading up 72 points (up 0.9%). The BSE Mid Cap index and the BSE Small Cap index are also trading on a positive note, up by 0.5% and 0.6% respectively. Gold prices, per 10 grams, are trading at Rs 29,084 levels. Silver price, per kilogram is trading at Rs 39,565 levels. Crude oil is trading at Rs 3,361 per barrel. The rupee is trading at 67.24 to the US$.

Crude oil is witnessing buying interest. It was noted that crude oil futures rose to their highest levels in seven months in yesterday's trading. This came after data showed a larger-than-expected declined in bloated inventories in the US. The US energy department reported that crude oil inventory fell by 4.2 million barrels in the last week.

Crude oil prices have shot up from their record low levels in January. The rise is backed by expectations that markets will rebalance with a fall in inventory levels, thereby easing the prolonged supply glut. Also, estimates about rising consumption of oil by motorists and other oil users have aided this rally.

One shall also note that the US Energy Information Administration (EIA) during last week stated that demand for oil worldwide is set to grow by 270,000 barrels per day (bpd) in 2016. Also, reports last week reported a slowdown in US drilling and an increase in Chinese crude refinery processing. These developments led to an uptrend and crude oil prices rose to fresh 2016 highs during the last week.

So now that the prices are recovering, does it make sense to bet on oil? Are crude oil companies a good long-term investment? Read the recent edition of The 5 Minute WrapUp titled 'This Could Be the Biggest Buying Opportunity Out There' to know what Richa Agarwal, research analyst at Equitymaster, has to say in this regard.

Also, Vivek Kaul, editor of Vivek Kaul's Diary, recently shared his views on what the Modi government will do if oil prices continue to go up.

To keep a regular tab on the movements in crude oil prices, you can read weekly market commentary from the Daily Profit Hunter team. Their weekly commentary tracks the developments in the global economy as well as equity, currency and commodity markets.

Moving on to the news from automobile space. Tata Motors has received approval from an authorised committee to raise up to Rs 3 billion via issue of non-convertible debentures (NCDs). The committee has approved issuance of privately placed 3,000 non-convertible debentures (NCDs) of face value Rs 10,00,000 each, at par, aggregating up to Rs 3 billion.

The fund-raising is part of the company's plan to mop-up Rs 44 billion through issuance of NCDs in one or more tranches on a private placement basis.

The aforesaid funds are being raised to back the company's expansion plans.

Tata Motors is India's largest automobile company. The company had in the month of April reported a 9.9% YoY growth in sales. Domestic sales of commercial and passenger vehicles rose 11% YoY at 35,978 units during the month. Sales of passenger vehicles in the domestic market last month stood at 11,161 units, up 7.9% YoY. One shall note that FY16 turned out to be a disappointing year for the Indian auto industry. The only segment that managed to grow in double digits was commercial vehicles (CVs). But this was largely led by medium & heavy CVs.

Presently the stock of the company is trading up by 0.6%.