Banking, auto stocks lead the gains

Fri, 28 Nov 01:30 pm

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   Closing   

The Indian markets continued to trade comfortably above the dotted line during the previous two hours of trade. The BSE-Sensex is trading higher by about 350 points or 1.2%, while the NSE-Nifty is up by about 112 points or 1.3%. Buying activity is seen across the board, with banking and automobile stocks being the most preferred. Midcaps and smallcaps were trading firm as well with the BSE Mid Cap and BSE Small Cap indices trading higher by about 1.2% and 0.8% respectively.

Stock markets in other parts of Asia were trading firm at the time of writing. The rupee was trading at Rs 61.97 to the dollar at the time of writing.

Auto stocks were trading firm with Tata Motors, Mahindra & Mahindra and Maruti Suzuki leading the pack. The stock of Maruti Suzuki is trading higher by 2% today. Gains in the stock are seemingly on the back of news of the company expecting growth in volumes of 10% for the current year as compared to the industry average of 3%. As per the company, a change in customer profile as well as pent up demand has led it to perform well. What has also changed for the company is the average customer profile which has dropped to 33 years as compared to 41 years a year before. As for the pent up demand, the same was bound to happen after a three year market decline. A factor that has also played in favour of the company has been the impact of the narrowing gap between petrol and diesel prices which has led to a shift in customer preference. As per the company, Maruti's petrol car sales have increased from 30% of the overall sales to 35%. The management expects the ratio to stabilize at 50-50 due to reducing price gap between the two fuels. Talking about the long term picture, the company's management has set in a target of selling 2 million cars per annum from the current levels of 1.2 m cars. This is a target it wants to achieve by 2020.

Most of the Cement stocks are trading firm today, with Heidelberg cement and India cements being the leading gainers in the pack. As per the financial daily, the Kumar Mangalam Birla-owned Ultratech cement, is raising $ 1.2 bn to fund its Holcim asset buy. Reportedly, UltraTech has made a non-binding offer to take over Holcim's Brazilian assets. Holcim's is a Swiss-based company, will soon announce the results of the bids it has received from across the world. Swiss firm is selling its assets to meet the regulatory requirements for a merger with Lafarge, and Brazilian asset is part of that. UltraTech Cement is in talks with bank to raise $1.2 billion to fund the takeover. Ultratech was trading up by 1% at the time of writing.