The Indian markets have started today's session on an extremely positive note. The benchmark indices opened way above the breakeven mark and have marched further upwards since then. Other key Asian markets are trading in the green with Japan (up 3.2%) leading the pack of gainers. The US markets closed higher by 0.1% last Friday.
Currently in India, heavyweights from the BSE-Sensex are trading strong with metal and auto stocks attracting investors' interest. The BSE-Sensex is trading higher by around 220 points, while the NSE-Nifty is up by about 60 points. Buying interest is also being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 1% and 1.1% respectively. The rupee is trading at 46.26 to the US dollar.
Cement stocks have opened the day on a strong note. Gainers here include JK Lakshmi Cement and Dalmia Cement. As per a leading business daily, India's third largest cement maker Ambuja Cements plans to expand its capacity to 24 m tonnes (MT) from the current 19 MT by year-end. The expansion will require investments of around Rs 35 bn. The company also plans to add grinding capacities in two of its existing plants. Overall, the company will invest around Rs 47 bn, which will be funded through a mix of internal accruals and debt. Swiss-based Holcim holds a 46% control in Ambuja Cements. It has a strong presence in the western and northern regions of India. In our view, the capacity expansion at most cement companies reflects the strong demand from the infrastructure sector. Housing activity and the upcoming Commonwealth Games are also demand drivers. In fact, cement prices have increased by Rs 15 per 50 kg bag in the North and Rs 5 per bag in the West since January this year.
Banking stocks have opened the day on a positive note. Gainers here include Bank of Baroda and Canara Bank. As per a leading business daily, India's second largest public sector bank Punjab National Bank (PNB) has set a target of achieving business of Rs 10 trillion by FY13, up from the Rs 4 trillion it did in the calendar year 2009. In order to achieve this ambitious target, the bank plans to expand its customer base from the current 46 m to 150 m by FY13. Much of this expansion will be driven by information technology. PNB has 4,894 branches currently. It may be noted that, traditionally the bank has a strong presence in rural and semi urban areas. As a result, it has maintained one of the highest proportions of low cost current and savings account deposits among the public sector banks.