The optimism continues

Wed, 1 Dec 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. Currently, stocks from the metal, banking and consumer durables spaces are leading the pack of gainers, while those from the IT and FMCG spaces are amongst the top underperformers.

The BSE-Sensex is trading up by around 220 points, while the NSE-Nifty is up by about 65 points. Stocks from the mid and small spaces continue to garner the investors’ interest as the BSE-Midcap and BSE-Smallcap indices are trading higher by 2.3% and 2.8% respectively. The rupee is trading at 45.69 to the US dollar.

Auto stocks are currently trading firm led by M&M, Ashok Leyland and Escorts. The stock of passenger car major, Maruti Suzuki is trading lower despite the company reporting decent sales volumes for the month of November 2010. During the month, the company sold a total of 112,554 vehicles, which is higher by 28% YoY. During the same month last year, the company sold 87,807 vehicles. It may be noted that this is the second consecutive month wherein the company has crossed the 100,000 mark in terms of total sales volumes. Of this total, domestic sales stood at nearly 91% of sales as compared to 87% last year. Domestic sales increased at a strong pace of 34% YoY, while exports decreased by 12% YoY during the month. Within the domestic market, volumes growth was led by the company’s A2 and C segments. The A2 segment includes models such as Alto, Wagon-R, Zen, Swift, A-Star and Ritz, while the C segment includes vehicles such as Omni, Versa and Eeco. The A2 segment formed more than 72% of the total volumes during the month.

As for the cumulative volumes in the year till date, total volumes stood at 828,440 as compared to 646,139 during the corresponding period last year. Domestic sales grew by 32% YoY while exports volumes increased by 6% YoY. For the full year FY10, the company sold over 1 m units.

Engineering stocks are trading firm with Suzlon and Punj Lloyd posting significant gains. However, BHEL, Bharat Bijlee and Thermax are trading in the red. Siemens, the Indian flagship firm of Germany-based Siemens AG, has launched the second phase of its steam turbine and process compressors manufacturing facility at Vadodara. With the expansion, the factory will now be able to manufacture 150 MW steam turbines. Prior to this expansion, the factory was manufacturing smaller steam turbines up to 45 MW. With the expansion in place, the factory will also manufacture process compressors for the domestic and other potential markets.

This expansion program is in line with the announcement made by Siemens AG earlier this year of investing nearly Rs 16 bn in India over a period of three years. The investment will be used to set up six hubs of base level products. These products will cater to the mid and low end segments which constitute around 70% of the total market in India.