Benchmarks trade flat after a soft start

  The Indian equity markets are trading flat after making a soft start as investors remained cautious on expectation of key interest rates hike by the Reserve Bank of India at its monetary policy review in the later in the day. The US markets closed marginally lower overnight and most of the Asian indices were trading in the negative terrain at this point of time, dampening the sentiments. Back home, on the sectoral front software gauge was witnessing the maximum gain in trade followed by banking and public sector undertaking while, auto, realty and fast moving consumer goods stocks remained the top losers on the BSE sectoral space. However, the broader indices were outperforming benchmarks. Meanwhile, PSU oil marketing companies viz., Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Indian Oil Corporation were trading higher on the back of ease in crude oil prices.The market breadth on the BSE was equally divided; there were 858 shares on the gaining side against 855 shares on the losing side while 59 shares remained unchanged.

The BSE Sensex opened at 18,979.31; about 20 points lower as compared to its previous closing of 18,998.02, and has touched a high and a low of 18,986.70 and 18,898.08, respectively. The index is currently trading at 18,981.49, down by 16.53 points or 0.09%. There were 11 stocks advancing against 19 declines on the index.

The overall market breadth was evenly divided with 48.42% stocks advancing against 48.25% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices gained 0.13% and 0.04%, respectively.

The top gaining sectoral indices on the BSE were, Metal up by 0.34%, IT up by 0.23%, Bankex up by 0.23%, PSU up by 0.18% and TECk was up by 0.13%. While Auto down by 0.48%, Realty down by 0.33%, FMCG down by 0.25%, CD down by 0.12% and CG down by 0.11% were the top losers on the index.

The top gainers on the Sensex were Sterlite Industries up by 1.05%, Jindal Steel up by 1.04%, Infosys up by 0.83%, SBI up by 0.73% and RCom was up by 0.61%.

On the flip side, M&M down by 1.23%, JP Associates down by 1.08%, Bajaj Auto down by 0.85%, Tata Motors down by 0.74% and TCS down by 0.74% were the top losers on the index.

Meanwhile, Indian automobile industry seems to have started the new fiscal on a positive note with various auto makers such as Tata Motors, Maruti Suzuki, Bajaj Auto, Hyundai Motors and TVS Motors posting good growth compared with the same period of the previous year. However, sequential growth seems to have slowed down a bit when compared the April 2011 growth figures with March 2011. The industry is lagging behind as customer's sentiments are hurt by rise in vehicle prices, fuel costs and loan rates.

Car market leader - Maruti Suzuki (India) sold a total of 97,155 vehicles, up by 4.40% over April 2010 sales of 93,058 units. This includes 10,011 units of exports during the month. The company has reported a decline of 85% when the growth of April is compared with the growth of March. In April 2011, the company has sold 87144 units in the domestic market, up by 8.9% over 80,034 units in corresponding month last year. The sales in A1 segment rose by 12%, in A2 segment rose by 1.8%, in A3 segment surged by 39.10%, while the sales in C segment too registered a growth of 22.20%. 

India's second largest car maker Hyundai Motor India reported marginal increase in its total sales for April at 52,058 units, compared to 52,020 units sold in April last year. In the domestic market, its sales rose by 11% to 31,636 units from the 28,501 units in same month last year. However, exports fell by 13% to 20,422 units from 23,519 units in the year-ago period.

Auto major Tata Motors' April sales have witnessed a growth of 13% at 64,383 units as compared to 57,199 vehicles sold in April 2010. Domestic sales of the company for reporting month stood at 60,125 units, up 11% over 54,062 units in the year ago period. Commercial vehicles' segment registered a growth of 19% during the month of April 2011 in the domestic market at 36,738 vehicles against 30,963 vehicles sold in April last year. On the other hand, the passenger vehicles' segment witnessed about 2% surge in the domestic sales in the last month at 25,436 units compared to 24,899 units in the same month of 2010. Sales from exports grew by 36% in April 2011 to 4,258 vehicles from 3,137 vehicles in April 2010.

Meanwhile, the sequential growth seems to have declined as several companies raised prices to offset the impact of higher raw material costs. Also, borrowing costs are rising as RBI is increasing interest rates to tame inflation. Further, April sales are also traditionally lower than in March when companies in India give bulk orders for vehicles to save on depreciation costs in the past financial year. However, the industry can look forward to better sales in the future as the India government has forecasted normal monsoon for coming season which could push sales of not only farm vehicles like tractors and threshers but also passenger vehicles as farm incomes would grow strongly. Furthermore, with India's per capita income exceeding $1,000, the size of the Indian economy now seems to have crossed a critical minimum level where the auto demand starts turning around in a big way, as was seen in China in the last decade or the US in 1960s and 1970s.

The S&P CNX Nifty opened at 5,689.70; about 12 points lower compared to its previous closing of 5,701.30, and has touched a high and a low of 5,700.70 and 5,673.00 respectively.The index is currently trading at 5,700.60, lower by 0.70 points or 0.01%. There were 23 stocks advancing against 27 declines on the index.

The top gainers of the Nifty were Kotak Bank up by 1.43%, Sterlite Industries up by 1.38%, Jindal Steel up by 1.18%, IDFC up by 1.04% and Infosys up by 0.96%.

GAIL down by 1.33%, M&M down by 1.04%, Bajaj Auto down by 1.00%, JP Associates down by 0.92% and ACC was down by 0.81%, were the major losers on the index.

Asian markets were trading mostly in the red; Jakarta Composite was down 34.10 points or 0.89% to 3,815.20, KLSE Composite was down 3.62 points or 0.24% to 1,531.33, Straits Times was down 23.67 points or 0.74% to 3,156.19, Seoul Composite was down 34.85 points or 1.56% to 2,194.11 and Taiwan Weighted was down by 88.71 points or 0.98% to 8,919.16.

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