Indian markets managed to sustain the momentum seen in early trades during the previous two hours of trade. Buying interest is being seen across the board mainly in stocks in the reality, power, metal and oil and gas space.
BSE-Sensex and NSE-Nifty are trading higher by 152 and 50 points respectively. BSE-Midcap Index is up by 97 points while the BSE-Smallcap index is trading 114 points above yesterday’s closing. The rupee is trading at 45.88 to the US dollar.
The market for small cars in the price range of US$ 4,500 - 5,000 is set to grow rapidly and is anticipated to account for 20% of total global sales in a few years. Hence, it should not come as a surprise that several car companies are keen to field products in this price range. According to a leading daily, Nissan, which is a Japanese car maker is in talks with Ashok Leyland to develop a small car for the global market. Nissan is already in an agreement with Ashok Leyland to manufacture light commercial vehicles. The main market for these small cars are China and India with countries like Indonesia, Vietnam, Brazil, Colombia along with a few more Latin American nations also possible markets. While Nissan is also a partner with Bajaj Auto and Renault in developing ultra low cost cars, the project has not been successful as yet in producing a cheap car. In case the project with Ashok Leyland materializes, Ashok Leyland would be able to get its foot into a lucrative fast growing market.
Stocks in the metal sector are amongst the top gainers with Welspun Gujarat and Jindal Steel leading the companies in the BSE-Metal Index. Increase in excise duty which was announced in the Union Budget 2010 - 11 has been passed on to customers by the steel manufacturers. According to a leading daily, JSW Steel, Ispat, Essar and Sail have all raised the prices of their products. While we are witnessing strong steel demand due to rapid infrastructure growth and demand for vehicles, the rise in steel prices is not expected to have a substantial effect on the demand as the price rise is miniscule. Furthermore, infrastructure contracts have a clause that takes care of cost increases when the project is in the construction stage. Due to this clause infrastructure companies may not suffer as the excise duty hike by steelmakers will be more or less covered under that clause.