Resistance at higher levels

Wed, 3 Nov 01:30 pm

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   Closing   

Although managing to move higher, the Indian indices faced resistance at higher levels during the previous two hours. Currently, heavyweights in the Sensex are trading strong with metal stocks leading the gains. However, telecom stocks have entered the negative territory.

The BSE-Sensex is trading up by around 149 points (0.7%), while the NSE-Nifty is up by about 51 points (0.8%). The BSE-Midcap and BSE-Smallcap indices are trading higher by 1% and 1.2% respectively. The rupee is trading at 44.35 to the US dollar.

IT stocks are trading strong with TCS, Tech Mahindra and Oracle Financial Services leading the gains. Oracle Financial Services announced its 2QFY11 results recently. The company has reported 14% and 36% QoQ growth in sales and net profits respectively for the quarter ended Septemebr'10. The increase in the topline was due to a strong growth in the license fees. This offset the marginal decline in the professional fees segment during the quarter. Operating margins increased by 5.8% QoQ mainly due to savings in the cost of revenues which fell as a percentage of total sales. Net profits grew by 36.3% QoQ mainly due to higher interest and other income as well as lower depreciation charges. The company added 15 new customers during the quarter and signed new licenses of US$ 24 m as against US$ 7.2 m signed during the previous quarter (June 2010).

Auto stocks are currently trading firm led by Bajaj Auto, Tata Motors, Hero Honda and M&M. The stock of Bajaj Auto has been in demand over the past few days. This is on the back of the company reporting strong sales numbers for the month of October 2010. Total sales volumes stood at 370,816 units as compared to 280,455 units during the same month last year. This is an increase of 32% YoY. Motorcycle sales formed about 89% of the total volumes during the month. Motorcycle sales volumes stood at 329,776 units as compared to 249,681 unties last year, which is an increase of 32% YoY. It must be noted that this is the highest motorcycle sales volumes recorded by the company. Sales of the 'Pulsar' brand of motorcycles formed about 29% of the motorcycle sales during the month. Sales of commercial vehicles stood at 41,040 units contributing to the balance share of volumes. Exports increased at a marginally slower pace of 31% YoY and formed nearly 30% of the total volumes during the month. This is similar to last year's volumes.

In the year till date, the company total volumes sales stood at 2.3 m as compared to 1.5 m last year. Motorcycle sales stood at about 89% of volumes, while commercial vehicles formed the balance. Motorcycle sales grew by 53% YoY, while commercial vehicle sales grew by 44% YoY.