All major Asian stock markets have opened the day on a firm note with stock markets in China (up 4.2%), Hong Kong (up 2.4%) and South Korea (up 2.3%) leading the gains in the region. The Indian share market indices have also opened the day on a firm note. Stocks in the metal and banking space are leading the gains.
The Sensex today is up by around 248 points (1.4%), while the NSE-Nifty is up by around 72 points (1.4%). Mid and small cap stocks are also trading in the green with the BSE Mid Cap and BSE Small Cap indices up by around 1% and 1.1% respectively. The rupee is trading at Rs 55.55 to the US dollar.
Auto stocks have opened the day on a firm note with Tata Motors, Bajaj Auto and Ashok Leyland leading the gains. As per a leading financial daily, Chennai-based two-wheeler maker TVS Motor Company expects to achieve a sales growth of 7-8% in the financial year 2012-13 (FY13), in line with the expected industry growth. During the financial year 2011-12 (FY12), the company had sold 2.1 million units. However, over the last few months, sales have been hit. In August 2012, the company reported volume sales of 154,647 units against 194,898 units in the corresponding period of the previous financial year, a decline of 20.7%. The company hopes sales to improve during the upcoming festive season.
Oil & gas stocks have opened the day on a firm note with Reliance Industries, Indian Oil Corporation (IOC), Gas Authority of India Ltd (GAIL) and Bharat Petroleum Corporation Ltd (BPCL) leading the gains. As per Moody's Investors Service, the fundamental credit quality of state-run IOC has been deteriorating on account of lower refining margins and increasing under recoveries. It may require short-term funding before compensation is received from the government. However, the credit ratings agency has affirmed its Baa3 issuer rating on IOC with a stable outlook. The reason for maintaining IOC's final rating is the strategic important of the company to the Indian economy, lending it to greater government support. However, owing to the government's hesitance to reduce fuel subsidies as well weak refining margins are likely to cause IOC's credit metrics to remain weak over the next 12-18 months.