IT, pharma stocks prop up markets

Thu, 20 Nov Closing

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After trading below yesterday's closing levels for most part of the day, the Indian markets moved above the dotted line during the final hour of trade. The BSE-Sensex closed higher by about 34 points or 0.1%, while the NSE-Nifty ended with gains of about 20 points or 0.2%. While stocks from the consumer durables, and realty spaces were not in favour today, those from the information technology and pharmaceutical sectors were in demand. Midcaps and smallcaps ended the day on a weak note with the BSE Mid Cap and BSE Small Cap indices closing lower by about 0.1% to 0.3% respectively.

Stock markets in other parts of Asia ended the day on a mixed note while European markets were trading weak at the time of writing. The rupee was trading at Rs 62.1 to the dollar at the time of writing.

Banking stocks ended the day on a weak note with Canara Bank, Bank of India and Union Bank being the top underperformers. However, stocks of Kotak Mahindra Bank and ING Vysya Bank ended with gains of about 6% to 7% today. Gains in these stocks were one the back of reports of a possible merger between the two banks - with the latter being merged into the former. The share-swap ratio being considered is 2:2.5 i.e. two share of Kotak Mahindra Bank for every 2.5 shares of ING Vysya Bank. As reported by the Business Line, as of September 2014, ING Vysya Bank had deposits and advances aggregating to about Rs 446 bn and Rs 401 bn respectively. It had 573 branches and extension counters and 635 ATMs across the country. Kotak Mahindra Bank (standalone) on the other hand, had deposits and advances aggregating Rs 681 bn and Rs 609 bn respectively. It had 573 branches and extension counters and 635 ATMs across the country. It may be noted that the banks have not confirmed this development yet.

Auto stocks ended the day on a weak note with Mahindra & Mahindra and Maruti Suzuki leading the pack of losers. As reported by the Economic Times, Tata Motors is aiming to treble its commercial vehicle export volumes by FY19. The company is eyeing markets such as Russia and the ASEAN region as growth markets for achieving this goal. Currently, the company is focused on regions such as the Middle East and Africa. Tata Motors' management expects CV exports to come in at 50,000 units in the current year. It is targeting sales volumes of 150,000 over the next three to four years. The launch of the relatively new Prima series of vehicles is expected to help the company achieve the push required to attain this goal. Speaking about the domestic market, the company's management is of the view that some support is still required from the government's side, although the scenario is looking better. Nevertheless after two years of back to back declines of about 25%, the company expects M&HCV volumes to grow by about 15% in the current year.