Smallcaps outperform their peers

Fri, 4 Jul Closing

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   01:30 pm   

After witnessing selling pressure during the post noon trading session, buying activity picked up towards the end leading the stock markets to end the day on a firm note. The BSE-Sensex closed higher by about 140 points or 0.5% today, while the NSE-Nifty closed with gains of about 37 points or 0.5%. Barring stocks from the capital goods, consumer durables and metals spaces, gains were seen across the board. Realty and oil & gas stocks led the pack of gainers today. Midcap and smallcap stocks seem to be preferred all the more as the BSE Mid Cap and BSE Small Cap indices closed higher by about 0.6% and 0.8% respectively

Stock markets in other parts of Asia ended the day on a mixed note with Japan up by 0.6% while China closed down by about 0.2%. The rupee was trading at Rs 59.79 to the dollar at the time of writing.

Stocks of automobile companies ended the day on a mixed note with Ashok Leyland and Maruti Suzuki closing firm while Mahindra & Mahindra and Bajaj Auto closed weak. As reported by leading business daily, Tata Motors is planning to launch two new models - Zest and Bolt - in the passenger segment shortly. Given the high expectations of a revival in the sales volumes of the segment, the timing of new vehicles launch seems to be right. These vehicles will run on a new family of Revotron engines. As per the company it expects the demand for petrol vehicles to increase sharply given the contracting pricing differences between petrol and diesel. It is also believed that the company is looking to associate its products with a sequel of a popular Bollywood movie wherein many of Tata Motors' passenger vehicles will be featured. This move is part of the company's brand placement strategy.

FMCG stocks ended the day on a firm note with Colgate and ITC and Godrej Consumer leading the gains. As per the management of FMCG major, Hindustan Unilever (HUL), the company would be focusing on increasing sales at its existing stores rather than going in for a wider distribution. One way to do so is by pruning the non-performing SKUs or stock keeping units. The company would also be focusing on high margin as well as low penetration product categories such as packaged food, skincare and male grooming. It believes that the possibility of increasing sales from these categories is higher as compared to the traditional segments of soaps and detergents. In addition to this, HUL is also looking to sell products in various packages so as to boost volumes - largely in the ice cream and butter & margarine categories. As reported by a leading business daily, the company over the past few years has been aggressive in terms of increasing its coverage and now the focus seems to shift in increasing margins. During FY14, the company's revenues and operating profits increased by 9% YoY and 12% YoY respectively. Profits were up by 2% YoY.