IT, auto stocks lead gains

Tue, 11 Feb Closing

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   01:30 pm   

After starting the day on a firm note, the Indian equity markets traded in a range bound manner for the rest of the day, although the gains were tapered off towards the end. The BSE-Sensex closed with gains of about 30 points or 0.1%, while the NSE-Nifty ended higher by about 9 points or 0.2%. Stocks from the information technology, automobile and banking spaces were amongst the top gainers today. Mid and smallcap spaces also ended with gains with the BSE Mid Cap and BSE Small Cap indices up by about 0.3% and o.1% respectively.

Stock markets in other parts of Asia traded firm with Japan, Hong Kong and China up by about 1.8%, 1.8% and 0.8% respectively. The rupee was trading at Rs 62.44 to the dollar at the time of writing.

Auto stocks ended the day on a firm note with Bajaj Auto, and Ashok Leyland leading the pack of gainers. As reported by a leading business daily, sales of passenger vehicles fell to 160,000 units during the month of January 2014, a figure which is lower by 7.6% on a YoY basis. As per the Society of Indian Automobile Manufacturers (SIAM), this is the fourth consecutive month of decline in volumes for the segment. As for UVs, volumes declined by 6.3% YoY to a little less than 46,000 units. Domestic sales of commercial vehicles declined at a sharper pace of 21% YoY to about 50,000 units during the month. On the other hand, sales of 2-wheelers grew to 1.3 m units during the month, which is higher by 9% on a year on year basis. As per the Deputy Director General of SIAM, sales of two wheelers have been strong on the back of job losses in key sectors, leading consumers to prefer two-wheelers instead of four wheelers. Also, sales of two-wheelers in the rural areas remained strong on the back of the bumper crop this year. When the volumes of the industry on the whole will bounce back is anyone's guess, but it does seem that sentiments will remain subdued for the next few months as consumers seem to be awaiting the outcome of the upcoming general elections.

Stocks from the pharmaceutical sector ended the day on a weak note with Glenmark Pharma, Wockhardt and Lupin leading the pack of losers. Healthcare firm, Dr Reddys Laboratories reported a sound performance across most of the parameters for 3QFY14. During the quarter, its profits grew by strong 70% YoY while net sales grew by 23.3% YoY on the back of strong growth in its global generics business; revenues of which jumped 41% YoY to Rs 29.4 bn driven by North America and other emerging markets. Revenues from North America shot up by 76% YoY while emerging markets' sales increased by 25% YoY. Domestic revenues were up by 5% YoY, while business in Europe remained flat. However, revenues from pharmaceutical services and active ingredients (PSAI) segments dropped by 24% YoY on account of lower number of launch molecules and relatively higher overhead costs during 3QFY14. The earnings before interest, tax, depreciation and amortization grew at a strong pace of 91% YoY to Rs 8.6 bn. The company's operating profits expanded by 25% YoY despite higher expenses during the third quarter of FY14.