Indian share markets recover

Wed, 18 Jul 01:30 pm

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   Closing   

After persistent weakness since the start of the trading session, Indian share markets regained lost ground and are trading marginally in the positive in the last two trading hours. Majority of the sectoral indices are trading in the red with auto, consumer durables and Oil and gas stocks being the biggest losers. IT, metal and banking stocks are among the handful sectors trading positive.

The BSE-Sensex is trading up 19 points and NSE-Nifty is trading up 3 points. Both BSE Mid Cap and BSE Small Cap indices are trading up by 0.1% and 0.04% respectively. The rupee is trading at 55.2 to the US dollar.

Majority of auto-ancillary stocks are trading positive with NRB Bearings and Wheels India being the biggest gainers. As per a leading financial daily, lead acid storage battery manufacturer Exide Industries wants to focus on the home inverter (UPS) segment which it believes to be the next growth driver. The company is contemplating either a greenfield or brownfield expansion in this segment. The company in January 2012 had acquired the home inverter business of Kevin Power Solution at a cost of Rs 175 m. Exide has earmarked a capital expenditure of Rs 2.7 bn in the current fiscal to fund its expansion plans. The company expects to regain lost market share in FY13 backed by better performance by the industrial division with the automotive sector reeling under stress. The stock is down 0.9%.

Auto stocks are currently trading firm led by Bajaj Auto, Escorts and Ashok Leyland. A leading business daily has reported that Maruti Suzuki is facing difficulty in meeting delivery demands given that the bookings for the top end versions of its Swift, Dzire and Ertiga models are much higher than what was anticipated by the company. The key reason for the delays is not enough supplies of alloy wheels, which only goes in the top end version of the variants offered by the company. The company is trying to meet customer requirement (for the Ertiga only) by offering customers a discount on the vehicle and supply regular steel wheel tyres instead of alloy wheels. As per the company's management Maruti is looking at introducing a middle variant for select models which would not have alloy wheels. The company is believed to be working on the pricing aspects of the same.

As for the other two models, the company will not be following a similar strategy. As per the company, the waiting period for the top end version of such vehicles is close to a year. In absolute terms, demand for these vehicles is believed to have increased by 80% YoY.