The Sensex today is up by around 129 points (0.7%), while the NSE-Nifty is up by around 33 points (0.6%). Mid and small cap stocks are also trading in the green with the BSE Mid Cap and BSE Small Cap indices up by around 0.8% and 0.6% respectively. The rupee is trading at Rs 54.77 to the US dollar.
Auto stocks have opened the day on a firm note with Tata Motors, TVS Motor Company, Escorts and Ashok Leyland leading the gains. As per a leading financial daily, India's leading utility vehicle manufacturer Mahindra & Mahindra (M&M) plans to invest an average of about Rs 7-8 bn every year in new product offerings for the next three to five years. This does not include capital expenditure for capacity expansion in the automotive business. This decision has come on account of encouraging double-digit growth led by new launches in a sluggish market. The expansion of M&M's product portfolio with the launch of XUV, Quanto and Rexton, resulted in additional volumes as the company was able to cater to new customers. For this year, the company is set to launch a sub-4 metre Verito, electric car Reva NXR and two to three variants of utility vehicles of existing models.
Public bank stocks have opened the day on a firm note with UCO Bank, Bank of Maharashtra and Vijaya Bank leading the gains. As per a leading financial daily, India's largest public sector bank State Bank of India (SBI) has raised its credit growth guidance for the financial year 2012-13 (FY13) to 21% from the earlier estimate of 18%. The revision has come on the back of unexpected increase in retail and small and medium enterprises (SME) loan growth in the fourth quarter (4QFY13). As per Chairman Pratip Chaudhuri, the significant surge in advances was on account of the year-end rush as well as lag effect of substantial cuts in lending rates. It must be noted that SBI had slashed lending rates by a little over 100 basis points (1%) during the second and third quarters on retail (auto and home), micro and SME loans. Also, the bank has been aggressively taking over home loans from other banks. SBI's credit grew by about 16.07% year-on-year to over Rs 10,091.1 bn at the end of December 2012. This was in line with the loan offtake for the banking sector.