Autos and power boost the markets

Wed, 24 Nov 09:30 am

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Asian stocks have opened the day in the green. Hong Kong and China are the leaders. However, tension over exchange of fire in the Korean peninsula has led the Korean and Japanese markets to open the day in the red. The Indian markets have opened the day on a positive note. Stocks from the auto and power sectors are the main gainers.

The BSE-Sensex is trading higher by around 90 points (0.5%), while the NSE-Nifty is up by about 59 points (-0.9%). Mid and small cap stocks have opened in the positive as well, with the BSE-Midcap and BSE-Smallcap indices up by 0.7% and 0.8% respectively. The rupee is trading at 45.65 to the US dollar.

Banking stocks have opened in the green. State Bank of India, Yes Bank and ICICI Bank are among the top gainers. HDFC Bank on the other hand is trading in the red. The recent spate of IPOs in the market has led to growing fortunes for the investment banking industry of India. As per a leading daily, the revenue growth for investment banking in India has outpaced that of the emerging markets. PSU major State Bank of India has emerged as a clear winner along with JP Morgan. Revenues from investment banking activities have increased by 53% YoY from US$ 568 m last year to US$ 870 m in the current year. The increase was mainly due to the increase in deal volumes which was a result of higher liquidity in the western markets coupled with the India growth story. However, despite the growth, India lags behind China and Brazil who have come on the top with their blockbuster issues of the Agricultural Bank and Petrobras respectively. China accounts for 39.5% of the emerging markets' investment banking revenues. Brazil comes at the second place with a 8.3% share. India comes third with a 7.6% share.

Food stocks have opened the day on a high note as well. Nestle India, Britannia Industries and Lakshmi Energy are the major gainers. However ITC is currently witnessing selling pressure. The world's largest food company, Nestle, has increased its stake in its Indian subsidiary Nestle India. The parent has increased its stake by 0.8% to 62.76% as at the end of the September quarter. The stake was increased through stock purchases in the markets. The reason for this is that Nestle wants a bigger share in the consumption led story of its Indian arm. However, Nestle has stated that it has no plans to delist from the stock exchange in India. There has been speculation regarding the same in recent times. Nestle's holding in its local arm is one of the highest among its peers. Unilever holds about 52% in HUL while GlaxoSmithKline holds about 43% in GSK Consumer Healthcare.