Mid and small caps buck the trend

Tue, 4 Aug Closing

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The Indian equity markets closed the day in the red after the RBI kept the key interest rates unchanged. While the BSE Sensex today closed lower by 116 points, the NSE-Nifty closed lower by 17 points. Meanwhile, midcaps and smallcaps outperformed the market with the the BSE Mid Cap index closing higher by 1.1%, while the BSE Small Cap index ended higher by 0.7%. Consumer durables stocks were the biggest losers today while metal and auto stocks were favored.

Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 3.69% and the Hang Seng rose 0.03%. The Nikkei 225 lost 0.14%. European markets lost ground in early trade. The rupee was trading at 63.93 against the US$ in the post noon session.

Automobile stocks outperformed the market today. Ashok Leyland and M&M were among the leading gainers. Tata Motors continued to witness strong year-on-year growth in certain key segments in July 2015, with passenger cars (excluding UV's), M&HCV and Exports, growing by 27%, 21% and 16%, respectively, with the total sale of Tata Motors passenger and commercial vehicles at 40,154 vehicles in July 2015, growing by 1% over 39,629 vehicles sold in July 2014. The domestic sale of Tata's commercial and passenger vehicles for July 2015 were at 35,076 units, a decline of 1% over 35,266 vehicles sold in July 2014. Cumulative sales (including exports) for the fiscal at 156,664 units are higher by 5% over 149,633 vehicles, sold last year. The company's sales from exports were 5,078 units, in July 2015, higher by 16% compared to 4,363 vehicles in July 2014. The cumulative sales from exports for the fiscal at 18,588 units were higher by 27%, over 14,590 units, sold last year.

According to a leading financial daily, the government plans to sell 3% stake in state-owned gas utility GAIL India which could fetch over Rs 13 bn. The Finance Ministry has moved a draft Cabinet note for inter-ministerial consultations for selling over 380 m shares in GAIL through a public offer. The government holds 56.1% stake in GAIL. Divesting 3% interest will help the government keep its shareholding well above 51%, minimum strategic holding it has decided to keep in key public sector units. While the Cabinet has already approved the sale of 5% stake in Oil and Natural Gas Corp (ONGC) and 10% in Indian Oil Corporation (IOC), reportedly the DoD plans to sell 10% in Oil India (OIL) as well. The government is targeting Rs 695 bn from stake sale in PSUs this fiscal. Of this, Rs. 410 bn will come from minority share sale in PSUs and Rs. 285 bn from strategic stake sale.