Indian markets turn buoyant

Fri, 20 Dec Closing

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   01:30 pm   

Indian markets stood benign despite the Fed tapering announcement backed by consistent buying and closed the day on an optimistic note. Moreover, the likelihood of Indian economy growing at above 5% levels in 2014 as put forth by the United Nations (UN) drove the market rally. The surge was primarily led by the heavy-weight sectors such as banking, auto and oil and gas that witnessed highest buying interest today. The BSE Mid Cap and BSE Small Cap indices have outperformed and stood higher by 1.7% and 1.3% respectively. The BSE-Sensex closed higher by 371 points and the NSE-Nifty was seen up by 111 points.

On the global front, the Asian indices closed the day on a mixed note but most of the European indices have opened on an optimistic note. The rupee was trading at Rs 62.14 to the dollar at the time of writing.

Except Tube Investments and Force Motors, all the stocks from the Auto sector today closed the day on a positive note with TVS Motors and Escorts leading the pack of gainers.

A leading news financial daily states that the Suzuki Motor Corporation, the Japanese auto major and the promoter of Maruti Suzuki, is planning to increase its stake in the latter. The promoter company currently holds 56.2% stake in Maruti Suzuki and aims to streamline and integrate operations with the Indian subsidiary. Reportedly, the promoter company may opt for a share buyback from the market or acquisition of shares in a phased manner. Preferential issue of shares is also another possibility working out.

While this would prove a positive move for Maruti Suzuki, the near term pressures stand imminent for the company on account of uncertain economic scenario. That said, the management remains confident of the growth prospects on a longer horizon on the back of thrust on infrastructure and rising disposable incomes. Maruti Suzuki was up by 1.5%.

Except Jindal drill, all the stocks from the energy space closed the day on a firm note today with Guj. State Petronet and Hindustan Petroleum Corporation Ltd (HPCL) leading the pack of gainers.

As per leading news daily, the oil ministry is of the opinion that the higher rates of natural gas prices would aid domestic production and cut dependence on imports. The Government has decided to double the natural gas prices from April next year. Earlier in June the government had approved a new formula for pricing all the domestically produced natural gas. India currently imports half of its gas needs. Essentially, the country has the hydrocarbon potential which requires good amount of money to exploit. Several gas discoveries by firms like Oil and Natural Gas Corporation Ltd. (ONGC) and RIL had been declared unviable by the Directorate General of Hydrocarbons (DGH) as the gas price could not sufficiently cover the costs.

While the gas price hike comes as a positive move for all the gas producers, it comes with a rider. The company has to give a bank guarantee for shortfall in production from the block and sign a supplementary agreement with the government for the new dispensation.