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No respite for Indian indices
Mon, 30 Sep Closing

Indian equity markets languished in the red throughout today's trading session on the back of persistent selling activity across index heavyweights. There was no respite in the final trading hour either and the indices closed well below the dotted line. While the BSE-Sensex today closed lower by 348 points, the NSE-Nifty closed lower by 98 points. The BSE Mid Cap and the BSE Small Cap were not spared either and lost around 0.3% and 0.5% respectively. Losses were largely seen in banking and metals stocks.

As regards global markets, Asian indices closed weak today while European indices have also opened in the red. The rupee was trading at Rs 62.63 to the dollar at the time of writing.

Auto stocks closed mixed today. While Ashok Leyland and TVS Motors found favour, Tata Motors and Hero Motocorp closed in the red. As per a leading business daily, auto companies in India may have to face the possibility of a hike in dealer margins. The Indian auto industry has been witnessing a slowdown for quite some time now. As a result of which, most segments across the auto space witnessed falling volumes especially during the April-August 2013 period. For instance, as per SIAM, passenger vehicles declined by 5.3% during this period. Thus, inventory levels at dealer networks have risen by about 40%. The average inventory at the dealers' end is more than 2 months. In good times, the inventory turnaround time is 24-30 days. Currently, dealers earn a margin of around 2.5-3.5% and are looking to hike this. Whether the auto sector will be in a mood to relent remains to be seen. The silver lining in the cloud is that the monsoons have been good. There are hopes that volumes will improve during the festive season too. Further, despite the slowdown, players such as Bajaj Auto and Mahindra & Mahindra (M&M) are set to increase the prices of their vehicles.

Energy stocks also closed mixed today. While Gujarat Gas, Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd. (BPCL) closed firm, Petronet LNG and Oil and Natural Gas Corporation Ltd. (ONGC) closed in the red. As per a leading business daily, Hindustan Petroleum Corporation Limited (HPCL) has bought gasoline for October delivery. This is a rare move and has been more towards plugging a temporary shortfall caused by maintenance. Although there is not much clarity on the volumes bought, these were for its refinery at Vizag, which has been running at reduced rates due to a fire. Bharat Petroluem Corporation Ltd (BPCL) is also looking to buy gas as it is looking at shutting more than half of its Koch refinery in November for about a month. Having said that, the shortage may not be as pronounced as it was in June when the demand was higher on account of the summer season.

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Feb 19, 2018 (Close)