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Tuesday April 5, 1:30 PM
Slight recovery...
By Equitymaster.com
Markets have managed to recover in the previous hour of trade. However, the overall weakness persists. Auto, bank, commodity, energy, pharma and software stocks are witnessing selling pressure. Investors seem to have a taken backseat in light of the forthcoming quarterly earnings season.
The BSE Sensex is trading at 6,566 (down 38 points) and the Nifty is trading at 2,053 (down 10 points). The rupee is trading at Rs 43.82 per US Dollar.
The Maharashtra State Government has signed agreements with eight leading power generation companies for new generation projects totaling 12,500 MW at an investment of around Rs 500 bn to be set up over the next five years. Reliance (RELI.BO, news) Energy, Tata Power (TTPW.BO, news) , Essar Power and Jindal have signed agreements for building power projects in the state. These companies will have to sell half of the power produced to the MSEB and half to any customer within Maharashtra, not necessarily MSEB. In return, the state will help these companies to acquire land, water, fuel linkages and exemptions from paying stamp and octroi duties. However, there is not a great deal of enthusiasm among the private players, since selling power to the MSEB would involve a significant amount of risk. Stocks in the sector are trading weak today. NTPC (2%), PTC (1%), Reliance Energy (2%) and Tata Power (3%) are all in the red.
Maruti announced its vehicle numbers (volumes) for FY05 yesterday. Vehicle sales grew 13.6% to 536,301 units, the highest-ever annual sales. This includes export sales of 48,899 units. The compact car segment (Alto, Wagon R and Zen) and mid-size models (Baleno and Esteem) were the main drivers, growing at 54% and 109% respectively. Meanwhile, during March 2005, the company sold 54,613 units, including 3,920 units of exports (up 3.6% over the same month last year). However, it needs to be noted that higher steel and crude prices will put the margins under pressure in the medium term. As a result, investors must practice caution. The stock is down by as much as 3%. Hero Honda (HROH.BO, news) , M&M and Tata Motors are also trading weak.
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