Auto stocks lead markets higher

Tue, 17 Aug 09:30 am

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The Indian markets have started today's session on a positive note. The benchmark indices opened above the breakeven mark and have remained firmly in the positive territory. Other key Asian markets are in the red with Japan (down 0.7%) leading the pack of losers. The US markets closed marginally lower yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading strong with auto and construction majors finding investors' favour. The BSE-Sensex is trading higher by around 65 points, while the NSE-Nifty is up by about 15 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 0.5% and 0.6% respectively. The rupee is trading at 46.65 to the US dollar.

Steel stocks have opened the day on a positive note. Gainers here include Tata Steel and SAIL. As per a leading business daily, Tata Steel owned Corus will invest Rs 13.6 bn in a blast furnace at its Port Talbot steelworks in Wales. This will increase its capacity by 400,000 tonnes a year. It is part of Tata Steel's strategy to position Port Talbot as a producer of high-quality strip products on a global scale at a competitive cost base. It may be noted that another blast furnace was rebuilt a few years ago at Port Talbot. Corus is Europe's second largest steel producer with core operations in the UK and the Netherlands. Taken together with Corus, Tata Steel has an aggregate crude steel capacity of more than 28 m tonnes per annum (mtpa). The company is looking to increase its production capacity in India from 7 mtpa to 21 mtpa with a brownfield expansion at Jamshedpur and greenfield projects in Orissa and Chhattisgarh.

Software stocks have opened the day on a strong note. Gainers here include Infosys and TCS. As per a leading business daily, Wipro is planning to give a pay rise to employees at its IT services division, with effect from October. That will be the second hike in this calendar year. Apparently, the company had already started appraisals for the process. It may be noted that the company usually gives salary hikes to its offshore employees in October and onsite employees in January. However, in 2009, the company extended its annual compensation hike to February 2010 due to the slowdown. With an improvement in business environment, most Indian IT companies have seen a surge in their attrition rates during the last two quarters. Hence, they are resorting to various initiatives including salary hikes and generous variable pay.