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Mid and small caps outperform
Wed, 25 Jun 11:30 am

After opening flat; the Indian indices are trading in negative territory in the morning session led by continuous selling among the index heavy weights. The selling pressure is led by stocks from the Energy and FMCG sectors, while Realty and Consumer durable stocks are trading in the green.

The BSE-Sensex is trading down 40 points and the NSE-Nifty is trading down 10 points. The BSE Mid Cap index is trading up 0.4%, while the BSE Small Cap index is trading up 0.3% today. The rupee is trading at 60.1 to the US dollar.

Investment and NBFC stocks are trading mixed today. While Indiabulls Financial Services is leading the gainers, Religare Enterprises is trading on a weak note. As per a leading business daily, the RBI has announced that non-deposit taking NBFCs (NBFC-ND) can function as a business correspondents for banks. However, banks will need to ensure that the NBFC-ND must not get engaged in the practice of offering savings and remittances only to their own customers and bundling their services along with that of NBFC's customers. This will also make banks address any possible reputational risks arising out of the appointment and functioning of the business correspondents. This move will allow NBFC-NDs to offer limited services of banks in the unbanked areas that is mainly aimed at increasing the financial inclusion.

Auto stocks are trading mixed. While buying activity is high among Bajaj Auto and Ashok Leyland, Maruti Suzuki is trading weak. Despite the slump in Indian auto market which has witnessed almost three bad years it seems to be at the recovering stage. The largest car maker Maruti is expecting that the customers plan to spend on discretionary items like four wheelers. In fact, the company expects buyers to upgrade from its bread-and-butter range of small cars. With this view, Maruti expects to launch 6 new cars in next 1 to 2 years and that too mostly in the bigger categories. Maruti has recently performed well by gaining its lost share in the car market with its 50% market share in FY14. About 80% of the company's customers are in the sub Rs 6 lakh car ranges or lower, it expect more than a million are looking up for an upgrade to higher version. This is visible from the company's double digit share in utility vehicle segment out of the success of the Ertiga. As such Maruti wants to strengthen its presence in the bigger cars segment and is planning to line up couple of new cars in the segment.

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