The global equity markets appear to be cheering Ben Bernanke's latest announcement of QE-III. Asian stock markets have followed global cues and opened the day in green with markets in Japan (up 1.8%) , Hong Kong (up 2.7%) and South Korea (up 2.6%) leading the gains in the region. The Indian equity market indices have also opened the day on a positive note as well. Besides the positive global cues, the Indian markets appeared to have received an additional boost from the recent announcement on fuel price increase. The government announced a sharp increase in fuel prices with an aim to cut down the subsidy burden. This move is expected to help narrow the fiscal deficit that has been swollen by the fuel subsidies.
The Sensex today is up by around 327 points (1.8%). All the sectoral indices have opened on a positive note with stocks in the metal and banking leading the gains. The NSE-Nifty is up by around 100 points (1.8%). Mid cap and small cap stocks are also trading in the green with the BSE Mid Cap and BSE Small Cap indices up by around 1.1%and 0.9 % respectively. The rupee is trading at Rs 54.82 to the US dollar.
Auto stocks have opened the day on a firm note with Tata Motors and Bajaj Auto leading the gains. As per a leading financial daily, Ashok Leyland, Hinduja Group's flagship company foresees production constriction for its light commercial vehicle (LCV) Dost. Dost has been the company's bestselling LCV. The company has sold 20,479 units of Dost since its launch a year ago and now claims a 31% market share in the eight states that it operates in. The company will be able to look at exports only in the next financial year as it is already struggling to keep pace with the domestic demand with an average waiting period of two months. Its LCV line is expected to ramp up to peak production of 55,000 units in the next financial year. Currently, it is not clear if company would rejig operations or add shifts to meet the shortfall.
Textile stocks have opened in green led by Vardhman textiles and Pioneer Embroideries. As per a leading financial daily, Aditya Birla Group's Grasim Industries has entered into an agreement with Omikenshi Company, Japan to jointly develop new international markets for Viscose Staple Fibre (Rayon) products. As per the agreement, Omikenshi and Grasim will develop the technology together and manage the increased product anticipation as the companies enter the new market. As per the management, the synergies between the two companies will be leveraged for delivering enhanced value to its customers. Besides specific products at the core of the agreement, the two companies will also explore future collaboration through a joint research and development program.