Mid and Small caps outperform

Mon, 10 Dec Closing

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   09:30 am   

   11:30 am   

   01:30 pm   

Indices in the Indian equity market continued to cling to the dotted line during the closing hours of trade. Consequently, the session closed with both the benchmarks closing flat albeit with a slightly negative bias. Thus, while Sensex edged lower by around 14 points, NSE-Nifty closed almost unchanged. BSE Mid Cap and BSE Small Cap indices outperformed their large cap counterparts, edging higher by 0.7% and 0.3% respectively. Advance to decline on the Sensex were evenly split with there being one gainer for every loser.

While most Asian indices closed higher today, Europe is trading mostly in the red. The rupee was placed at Rs 54.5 to the dollar at the time of writing.

The marginal fall in the benchmark indices could be attributed to the weakness in the European markets where new political developments in Italy has again cast a shadow over recovery in the region. However, the fact that mid and small cap indices gained higher did indicate that buyers are still there if the price value proposition is correct. Short term, indices could get influenced by what's happening in Europe and the US but the long term trend is strongly upwards as per us owing to the relative insulation of the Indian economy against the western world.

Bharath Heavy Electricals Limited (BHEL), India's largest power generation equipment maker is looking to expand aggressively on the solar power equipment side of things. As per reports, the company hopes to invest around Rs 20 bn in order to set up solar equipment manufacturing facility with a capacity of around 600 MW. Of the total amount, around Rs 5 bn to Rs 6 bn will be invested initially and the investment would be increased according to the expansion of the solar gear making plant. Worryingly, the move comes at a time when imports of cheap solar gears from China have surged along with an overcapacity at some Indian players. The stock closed marginally higher on the bourses today.

Tata Motors on the other hand closed marginally lower today. This despite good marketing efforts by the company to shore up its falling sales. As per reports, the company has launched the ultimate December offer, where it is offering discount and freebies worth up to Rs 1.5 lakh on purchase of different models. The offer is valid only for a short term period. Interesting to note that this offer comes at a time when other manufacturers are busy hiking the price of their cars. The company has reported around 35% decline in sales for November on the back of intense competition. The current offer could help bring some shine back. However, it is not a sustainable long term strategy as per us.