The Indian market shed their first half negativity as buying activity picked up during the final hour of trade. The BSE-Sensex closed higher by about 131 points or 0.5%, while the NSE-Nifty ended with gains of about 41 points or 0.5%. Barring stocks from metals and pharmaceuticals space, gains were seen across the board with auto and power stocks being the most in favour today. Midcaps and smallcaps ended the day on a strong note with the BSE Mid Cap and BSE Small Cap indices closing higher by about 0.9% to 1.1% respectively.
Stock markets in other parts of Asia ended the day on a weak note with Japan and Hong Kong down by about 3% and 0.2% respectively. European markets were trading weak at the time of writing. The rupee was trading at Rs 61.68 to the dollar at the time of writing.
Auto stocks were in demand today with Tata Motors and Hero Motocorp leading the pack of gainers. As per a leading business daily, commercial vehicle major has bagged two major orders worth US$ 79 m. These are integrated projects in Tanzania and Zimbabwe. The company would be supplying buses, light commercial vehicles, trucks, as well as spares and allied services as part of the contract. As per the company's management, these orders have been won amidst stiff competition and are continuations of many pilot projects taking place in Africa. This is a major development for the company as it would help further diversify its sales profile. Not to mention that Africa is expected to be a strong area of growth going forward and as such would bode well for Ashok Leyland in the future. The stock of Ashok Leyland ended the day with gains of about 1.6%.
In the first seven months of the previous financial year i.e. between April to October 2013, equity mutual fund schemes have seen a total outflow of Rs 85 bn. However, in the current year, the figure stands at Rs 390 bn. This figure is however in the positive this time around. This clearly indicates the positive sentiments of retail investors, especially given that the retail investor participation in the past five years had pretty much disappeared. As reported in the Hindu Business Line, such funds have attracted over 0.7 m investors to the market in the past seven months. Total assets under management currently stand at Rs 11 trillion. While this is a positive sign - as more and more investors are entering the market and investing in equities which is an asset class that usually outperforms over longer periods - we cannot help but be wary about the timing of such investors; especially considering the overall euphoria surrounding the markets at the moment. If history is anything to go by, retail investors (on the whole) do not have the best sense of timing the market as they would usually increase exposure at a time when the scenario is all hunky dory.