Banks and realty push markets higher

Mon, 2 Aug 11:30 am

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After starting today's session on a positive note, indices have continued to latch onto further gains in the previous two hours of trade. Other key Asian markets too are trading in the green. Stocks from realty and banking space are witnessing strong buying interest while stocks from IT and health care space are trading flat.

The BSE-Sensex is trading up by around 160 points, while the NSE-Nifty is up by about 52 points. Buying interest is also visible amongst the mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.9% and 1% respectively. The rupee is trading at 46.21 to the US dollar

Auto stocks are trading mixed with Bajaj Auto and Hero Honda leading the pack of gainers. However, M&M and Maruti are trading flat. Tata Motors recently came out with its sales figures for the month of July. The company reported total sales (including exports) growth of 41% in July 2010. The company sold 67,799 units of commercial and passenger vehicles in July as compared to 48,054 units in the same period a year earlier. All the brands namely Nano, Indica and Indigo registered strong growth except for Fiat Auto. Sales for the Italian car brand declined 14.4% YoY to 2,690 units in the month of July. However, it should be noted that in the two wheeler segment Bajaj Auto and TVS Motors reported a sales growth of 66% YoY and 33% YoY respectively.

Oil & Gas stocks are trading strong with ONGC and Essar Oil leading the pack of gainers. ONGC announced its 1QFY11 results recently. The company reported a 9% YoY and 25% YoY decline in sales and net profits respectively. Top line declined during 1Q FY11 on account of higher subsidy burden. It shared the under recoveries of OMCs by allowing discount in prices of crude oil, kerosene and LPG. Operating margins declined to 59% during the period from 65% in 1Q FY10 due to increase in other expenditure. At the bottom line level, the higher subsidy burden affected ONGC by Rs 31 bn in 1QFY11 as compared to Rs 2 bn in 1QFY10. As a result, the company's net profit registered a decline of 25% YoY during 1QFY11. On the volumes front, ONGC continues to face difficulties in maintaining the levels of production from its ageing fields. While on the margins front as well, the company is subject to ad hoc subsidy sharing mechanism. However, the recent increase in gas prices has provided some respite.