Indian markets had a rather volatile outing today. While the morning session saw them languishing in the red, buying at lower levels picked up in the ensuing hours and pushed the indices above the dotted line. But the later hours saw profit booking once again take its toll and the markets were pushed back into the red. There was a surge in buying in the final hour which ensured a positive close for the markets. While the BSE-Sensex closed higher by around 43 points (up 0.2%), the NSE-Niftyclosed higher by around 14 points (up 0.3%). The BSE Midcap and BSE Small cap also closed higher by 0.3% and 0.2% respectively. Gains were seen in auto stocks, while IT and metals stocks were at the receiving end.
As regards global markets, Asian indices closed firm today while European indices have also opened in the green. The rupee was trading at Rs 45.05 to the dollar at the time of writing.
Cement stocks closed mixed today. While ACC and Ambuja Cement found favour, Madras Cements closed in the red. As per a leading business daily, cement companies reported healthy sales growth in February led by better demand from stockists and real estate companies. However, on a sequential basis, despatches were lower on account of a hike in prices. After a long lull in demand during the second half of last year, demand for cement was on the upswing in the last two months. This led companies to hike prices by Rs 8-15 per bag in February. Moreover, Coal India recently increased its contract prices by 30%. This has resulted in cement manufacturing costs getting dearer. Cement companies would be hoping to pass on the rise in costs to the consumers but it all depends on whether demand holds up. Real estate companies especially are facing the heat on account of rising interest rates. Certain projects have also been put on hold. Hence, it appears that cement companies could face some pressure on margins in the near term.
As per a leading business daily, India's food inflation rate eased for the fourth consecutive week as vegetable prices continued to cool. The annual food inflation rate was lower at 10.39% compared with 11.49% the week before. Food prices have corrected of late on the back of improvement in supplies. Having said that, there is a possibility that this correction may not last for long as demand pressures remain. The cooling in food prices will bring some relief for the RBI which has been raising rates consistently for some time now without any easing in inflation. However, in the longer term, the government will have to address issues such as ramping up agricultural infrastructure and improving storage facilities to avoid food wastages.