Indian equity markets held on to early morning gains and traded in the green during the last two hours of trade. Sectoral indices are trading strong except FMCG, auto and consumer durables.
The BSE-Sensex is trading higher by 66 points and NSE-Nifty is trading higher by 20 points. BSE Mid Cap and BSE Small Cap indices are currently up by 0.6% and 0.8% respectively. The rupee is trading at 52.37 to the US dollar.
Auto stocks are trading weak led by Hero MotoCorp and TVS Motors. As per a leading daily, Ashok Leyland is planning to enter the US truck market through its European subsidiary, Avia. We may note here that US is one of the largest light duty truck markets in the world. Its annual volume is 0.1 m units. Ashok Leyland is looking for a local partner and may consider a joint venture, contract manufacturing or a distribution tie-up with the chosen party. Before entering the US market, the auto company wants to ensure that it has a number of models to offer. The Czech Republic truck maker, which Ashok Leyland took over in 2006, is already working on the range of 7-15 tonne trucks for the US market. The Indian auto company through its European subsidiary is aiming to start selling trucks in the US by 2014.
Engineering stocks are trading strong led by Finolex Cables and Siemens. According to a leading financial daily, Bharat Heavy Electricals Limited (BHEL) is at a loss of new orders from the delayed power projects. The existing order book is worth Rs 1.3 lakh crore, but lack of fresh orders is a cause of huge concern. Also, the ongoing projects are facing difficulties because of financial constraints of the power sector. The issues plaguing the power sector include issues of coal linkages, finances and delays in environment clearances. In anticipation of newer orders, BHEL has already expanded its capacity. Thus, concerns exist not just for BHEL but also for downstream industries of the company.