Bluechip stocks find favour

Thu, 8 Sep Closing

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   01:30 pm   

Strong buying towards the end of today's trading session led indices in the Indian stock market into the positive zone. The indices had a very lackluster outing for most of the session today oscillating to either side of the dotted line. However, the BSE-Sensex was able to move above 17,000 levels. It finally closed higher by around 100 points (up 0.6%) while the gains on NSE-Nifty stood at around 29 points (0.6%). The BSE Mid Cap and BSE Small Cap indices also performed reasonably well, closing higher by 0.3% and 0.7% respectively. Stocks from the consumer durables space and IT were the top sectoral gainers. Metal and Private Sector Unit stocks (PSU) however fell short.

Almost all the major Asian indices closed the day in the green while Europe is also trading in the positive territory currently. The rupee was trading at Rs 46.25 to the dollar at the time of writing.

On a slight positive side, the wholesale price index for food article rose 9.6% from a year earlier. This was a deceleration from the double digit, 10.05% increase in the week ended August 20. However, inflation still remains above RBI's comfort levels.

Reliance Communications (RCom) recently bagged an Rs 14 bn deal from HDFC Bank in order to build and maintain a data center. This deal, will span over a period of 15 years, and will involve building a new facility on over 350,000 sq ft in Mumbai. This data center will house computing power equipment. The first phase of the project will be complete over the next 12 months and the data centre will be set up with 24 months. Reliance Globalcom is a unit of RCom that won this deal, which is the largest in the sector so far. It provides managed network and data centre services to enterprises. This Mumbai data centre would the company's tenth such centre in the country. It will also become the new cloud computing centre for RCom. It expects the cloud computing market to grow to Rs 70 bn in India by 2015. RCom stock closed 0.7% higher for the day, while HDFC Bank closed 0.8% lower.

Maruti has been facing a number of issues at its Manesar factory in Haryana. In June 2011, a labour strike stalled production in the factory for a number of days. Production for one of its best-selling hatchbacks, 'Swift' was stalled. And, even now, the labour issues are not completely resolved. Although limited production is going on, the loss suffered since the trouble surfaced is estimated at about 8,550 units, valued at about Rs 4.3 bn.

In light of these problems, the car manufacturer is now looking at constructing a new factory in Gujarat. It may decide the same over the next 2-3 months. If it does eventually decide to go ahead with the plan, it will benefit from Gujarat's established port infrastructure to export its cars worldwide. Maruti's chief executive, Shinzo Nakanishi said that the company plans to invest about Rs 60 bn (US$ 1.3 bn) in building a new plant that will open after 2015 and eventually have an annual capacity of 1 million vehicles.