Indian share markets surge

Fri, 10 Jan 01:30 pm

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Backed by persistent buying in index heavy-weights Indian share markets surged in the post-noon trading session. Majority of the sectoral indices are trading in the green with IT, oil and gas and FMCG stocks being the biggest gainers. Auto, metal and power are the only stocks trading in the red.

BSE-Sensex is up 200 points and NSE-Nifty is trading up by 53 points. BSE Mid Cap is trading up 0.4% and BSE Small Cap index is trading up 0.7%. The rupee is trading at 61.9 to the US dollar.

Majority of the automobile stocks are trading in the red with Mahindra & Mahindra and Ashok Leyland being among the major losers. Escorts is the only stock trading in the green. As per a leading financial daily, the automobile industry registered its worst performance in 2013. According to data from Society of Indian Automobile Manufacturers (SIAM), car sales in 2013 fell for the first time in 11 years, registering a decline of 10% to 1.8 m units. Depressed consumer demand on account of economic slowdown, high inflation, rising fuel prices and stiff interest rates pulled down sales during the year. Sales of commercial vehicles witnessed a steeper fall of 15.6% to 6.87 lakh units as a result of stalled infrastructure projects and absence of mining operations. The only redeeming factor during the year was a 4% growth in two wheeler sales to 14.4 m units aided by strong rural sales and growing demand for scooters from the urban region. SIAM expects the depressed environment to continue for some more time, going ahead.

Most energy stocks are trading firm. While Reliance and Oil and Natural Gas Corporation Ltd. (ONGC) are leading the pack of gainers, Mangalore Refinery and Petrochemicals (MRPL) is trading in the red. As per a leading business daily, an empowered group of ministers has deferred their decision on the divestment of government's stake in Indian Oil Corporation (IOC). There has been stiff opposition for divestment from the petroleum ministry on account of lukewarm response from the investors after the international and domestic road shows. The government planned to raise Rs 45 bn out of 10% stake sale in the company. Besides, the stock of IOC has been trading at 5 year's low level currently and divestment would lead to less value for the exchequer. IOC's stock has nosedived on account of lack of clarity with regards to export parity pricing and sharing of subsidy burden. Even the investors in the road shows raised question on clarity of these issue going forward. IOC is trading up by 1.4% today.Indian share markets surge