Largecaps in favour today

Thu, 4 Nov 01:30 pm

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The Indian markets continued to trade well above the dotted line during the previous two hours of trade. Buying activity is being seen in stocks across the board led by those from the oil & gas and metal sectors. Stocks from the auto and banking spaces are finding favour as well. Healthcare and consumer durables stocks, although trading firm, are amongst the top underperformers at the moment.

The BSE-Sensex is trading up by 350 points (up 1.7%), while NSE-Nifty is trading higher by about 95 points (up 1.6%). BSE-Midcap is up by 0.6% while BSE-Smallcap index is trading higher by 0.5%. The rupee is trading at 44.31 to the US dollar.

India's annual food inflation eased for a third week in late October on improved supply and lower vegetable prices. The food price index in the week ended October 23 stood at 12.85% as compared with 13.75% in the preceding week, as the prices of vegetables and pulses fell. Fuel inflation for the same period was at 10.67%, down from 11.25% the prior week. The primary articles price index was up 15.43%, compared with an annual rise of 16.62% a week earlier. Food makes up a little over 14% of the wholesale price index (WPI) while fuel contributes about 15%. India's farm ministry expects a 10% rise in summer grains output and a 17% increase in cane output that are likely to ease supply side pressures on food prices. Food inflation, which has been for long feared by policymakers as a supply-side problem, is now turning into a demand-driven problem with spurt in demand for food items due to rising income levels.

Auto stocks are currently trading firm led by M&M, Ashok Leyland and Tata Motors. A leading business daily has reported that two-wheeler major Bajaj Auto has increased stake in European bike maker KTM Power Sports AG. The company bought 244,600 shares through its wholly owned subsidiary Bajaj International Holdings BV Netherlands yesterday. However, the amount invested was not disclosed. With this, Bajaj Auto’s stake goes up to 38.1% from 35.7%. Earlier, the company had bought about 15% stake for a sum of Rs 3 bn. This was back in 2007. As such, since then it has been steadily increasing its stake in the company. It is believed that till date, Bajaj Auto has invested around Rs 8 bn for its stake in KTM. The idea behind this move has been to jointly develop motorcycles for the Indian and European markets. As per the management, the first of the co-developed product, the KTM Duke 125 will be launched in Europe next year. In India, the plan is to launch these bikes during the second half of 2011.