Auto stocks push markets higher

Fri, 2 Jul 09:30 am

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The Indian markets have started today's session on a positive note. The benchmark indices opened at the breakeven mark but soon moved decisively into the positive territory. They have managed to hold on to their gains since then. Other key Asian markets are in the green with Singapore (up 0.9%) leading the pack. The US markets closed lower by 0.4% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading strong with auto, metal and construction majors attracting investors' interest. The BSE-Sensex is trading higher by around 80 points, while the NSE-Nifty is up by about 25 points. Buying interest is also being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.8% and 0.9% respectively. The rupee is trading at 46.54 to the US dollar.

Energy stocks have opened the day on a positive note. Gainers here include Indraprastha Gas and BPCL. As per a leading business daily, Indraprastha Gas (IGL) has hiked the price of piped natural gas (PNG) it supplies to households for cooking purposes by about Re 1 per cubic metre (cm). It has raised the price of PNG from Rs 15.9 per cm to Rs 16.9 per cm in Delhi for customers consuming up to 90 cm of PNG in four months. For customers consuming more than 90 cm in four months, the price would be Rs 21.1 per cm. The comparable prices in Noida, Greater Noida and Ghaziabad would be Rs 18.3 per cm and Rs 21.9 per cm respectively. The company's input costs have gone up with the government's decision to hike the price of administered price mechanism (APM) gas produced by ONGC. It may be noted that IGL had recently hiked its CNG prices to pass on the costs. However, it had deferred the hike in PNG prices. However, with the government raising LPG prices by Rs 35 per cylinder, it has now gone ahead and raised PNG prices.

Auto stocks have opened the day on a positive note. Gainers here include TVS Motor and Tata Motors. As per a leading business daily, Hero Honda has reported a 17% YoY jump in its sales in June at 426,454 units. It had sold 365,734 units in June last year. Interesting to note that this is the 18th time in a row that the company has sold over 3 lakh units in a month. The growth is visible across all segments including the scooter, Pleasure, which now contributes over 25,000 units per month to the overall volume. For 1QFY11, the company's volumes sales rose 10% YoY to 1.2 m units from 1.1 m units in 1QFY10.