Back in the green

Tue, 4 Jan 01:30 pm

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   Closing   

Strong buying activity during the previous hour of trade led the Indian markets to once again rise above the dotted line. Currently, stocks from the FMCG, oil & gas and healthcare spaces are leading the pack of gainers, while those from the banking and auto spaces are the top underperformers.

The BSE-Sensex is trading higher by about 25 points (up 0.1%), while NSE-Nifty is up by about 10 points (up 0.1%). The BSE Midcap is trading higher by 0.2%, while BSE Small cap index is trading 0.4% above yesterday’s closing. The rupee is trading at 44.88 to the US dollar.

Banking stocks are mainly trading in the red with Allahabad Bank, Indian Bank, ICICI Bank and IndusInd Bank leading the losses. However, Kotak Bank and Dhanlaxmi Bank are trading in the positive territory. Public sector lender SBI will set up a branch in Doha during the first quarter of 2011. As per a report, the bank had sought authorisation from the Qatar Financial Centre Regulatory Authority (QFCRA) to open a wholesale banking unit in Qatar in May 2010. Given the growing opportunities in Qatar and the region, the SBI has been planning to enhance its presence and business profile in the country and the Gulf region in a big way. The Doha office would not only focus on enhancing its India-related business, but also take care of global needs of the bank's existing as well as prospective customers. The services would include collecting large commercial deposits and making big loans to high net worth corporates and individuals, offering bank guarantees, counter-guarantees, Lines of Credit among others. Its operation would contribute substantially to the bank's global balance sheet.

The bank, which has set up an overseas banking unit at its headquarters in Mumbai to assess and explore its expansion activities abroad, is keen on increasing the bank's footprint globally. The SBI, which has 152 branches overseas, aims to increase the number of foreign offices to over 1,000 in the next couple of years. It also plans to open branch office in Jeddah (Saudi Arabia) soon.

Auto stocks are currently trading weak led by Bajaj Auto, Escorts, Tata Motors and Maruti Suzuki. Weakness in Maruti is presumably on the back of the company announcing a 13% decline in sales volumes on a month on month basis i.e. December 2010 over November 2010. During the month of December, the company sold 99,225 units, while volumes during the preceding month stood at over 112,000 units. However, as compared to last year, sales volumes are higher by 17% YoY. Exports seem to have disappointed this month as the company reported a 29% YoY decline in export volumes. Domestic volumes (about 90% of total volumes), on the other hand, grew by 26% YoY. Considering that the company has reported a 27% YoY increase in volumes during the year till date (including December 2010), investors seem to be disappointed with the company's sales volumes for the month of December. However, this may not be the case going forward as it is believed that the overall sales volumes were affected due to plant shutdowns.