Encouraging statements made by the new RBI governor Mr Raghuram Rajan in his first speech had a positive impact on the Indian indices today. The Indian equity markets began the day's proceedings on a firm note and this momentum was maintained throughout the trading session. While the BSE-Sensex today closed higher by 412 points, the NSE-Nifty closed higher by 145 points. The BSE Mid Cap and the BSE Small Cap also did well and notched gains of around 2% each. Gains were largely seen in banking, FMCG and oil and gas stocks.
As regards global markets, Asian indices closed mixed today while European indices have also opened mixed. The rupee was trading at Rs 66.14 to the dollar at the time of writing.
Most auto stocks closed firm today and the key gainers were Tube Investments, TVS Motors and Tata Motors. As per a leading business daily, Tata Motors is looking to launch the diesel version of its small car Nano. In an already tough environment for the auto industry, Tata Motors has seen its passenger vehicles badly hit as volumes have considerably declined. Nano has not been spared either and sales volumes of the car fell by as much as 78% YoY between April and July this year. On a much broader basis, Tata Motors has made organizational changes in the company and recently introduced 8 new products under five platforms under the Horizonnext initiative. Mini cars (with engine displacement up to 1 litre) today account for 23% of the 2.68 m strong passenger vehicle market in India. But the segment does not offer any diesel variants. How much of an impact the launch of the diesel Nano will have on Tata Motors' volumes going forward remains to be seen though.
Most steel stocks also closed firm today and the key gainers were SAIL, JSW Steel and Maharashtra Seamless. As per a leading business daily, domestic steel companies are looking to earmark considerable chunk of their production towards exports. One reason is the weak macro environment in India as a result of which demand has been sluggish. The other is that these companies want to reap the benefits of a falling rupee. The aim is also to utilize expanded capacities as well as to build a better product basket. For instance, Steel Authority of India Limited (SAIL) is looking to double export volumes to 700,000 tonnes this year. Export revenues too are expected to double to Rs 25 bn in FY14.