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Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
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Markets begin on a positive note 
(Thu, 13 May 09:30 am) 
 
The Indian markets have started today's session on a positive note. The benchmark indices opened above the breakeven mark and have managed to hold on to their gains since then. Other key Asian markets are also in the positive with Japan (up 1.5%) leading the pack of gainers. The US markets closed higher by 1.4% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading strong with auto and metal majors finding investors' favour. The BSE-Sensex is trading higher by around 140 points, while the NSE-Nifty is up by about 40 points. Buying interest is also being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.8% and 0.9% respectively. The rupee is trading at 44.85 to the US dollar.

Steel stocks have opened the day on a positive note. Gainers here include Tata Steel and JSW Steel. As per a leading business daily, Tata Steel plans to switch to a business model driven by quarterly contracts. It plans to switch to quarterly contracts for raw material suppliers from the existing annual pricing system. Contracts with key buyers like the railways and the auto sector will also be made a quarterly affair. Retail buyers already operate under a monthly time frame. This decision comes on the back of dramatic pricing policies of key global raw material suppliers, who are trying to cash in on the rising steel demand. It may be noted that BHP Billiton, Rio Tinto and Vale control the global iron ore industry. The coking coal industry is controlled by BHP Billiton, Rio Tinto, Anglo American and Xstrata. Iron ore prices have increased 30% since December 2009 to US$ 143 per tonne, while coking coal has increased 16% to US$ 220 per tonne. In our view, the switch to quarterly contracts will help Tata Steel pass on the rising costs, although it remains to be seen how buyers react to such a move.

Mid-cap engineering stocks have also opened the day on a positive note. Gainers here include Finolex Cables and Havells. Havells announced its FY10 results yesterday. The company has reported a 13% YoY growth in topline during the year. The biggest contribution came from the switchgears and the lighting and fixtures segment. Switchgear revenues increased by 16% YoY in FY10. Lighting & Fixtures revenues increased by 32% YoY due to increased sales of both Luminaries and CFL. On the margins front, while lower material cost was a common factor behind the margin improvement across segments, better product mix also helped matters in segments like lighting and fixtures. Besides improved operating performance, greater economies of scale and lower interest charges contributed to the robust growth in bottomline, which grew by 56% YoY during FY10.

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