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Small, midcaps in favour today
Wed, 5 Dec 01:30 pm

The Indian markets continued to trade well above the dotted line during the post noon trading session. While stocks from the information technology and power spaces are leading the pack of underperformers, those from the realty and metal sectors are amongst the investors' favourites today.

The Sensex today is trading higher by about 80 points (up 0.4%), while the NSE-Nifty is trading higher by about 20 points (up 0.3%). Stocks from the midcap and smallcap spaces seem to be more in favour as the BSE Mid Cap and BSE Small Cap indices up by about 0.7% and 0.9% respectively. The rupee is trading at 54.49 to the US dollar.

Auto stocks are currently trading firm led by Tata Motors and Hero Motocorp. As per a leading financial daily, Tata Motors wants to increase auto component imports from Korea and other South-East Asian countries like Vietnam, Thailand and Indonesia by 20%-25% over the next two to three years. According to the company, auto parts sourced from Korea are 10%-15% cheaper than Japanese components and are also better in quality than Chinese imports. In FY12, Tata Motors imported components worth Rs 16.4 bn forming 5% of its total raw material cost with China being the number one supplier followed by Korea. During FY13, the company expects component imports from Korea to increase to USD$ 85 m from USD$ 70 m last year. Tata Motors is also encouraging Korean auto part makers to set up base in India either independently or through a joint venture to offset rising labour costs in Korea.

Steel stocks are currently trading firm led by Tata Steel and Steel Authority of India (SAIL). SAIL reported an 8% YoY increase in volumes of saleable steel during the month of November 2012. As per reports, the company sold 0.972 m tonnes during the month as compared to the corresponding month last fiscal. As for the year till date i.e. April to November 2012, the total saleable steel production volumes stood at 8.2 m tonnes, which is higher by 2.3% YoY as compared to the corresponding period last year.

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