A slow start...

Markets have opened on a positive note on the back of noticeable buying interest in banking stocks. While there is selective buying interest in technology and pharma sectors, auto stocks are a mixed bag. The mid-cap index has gained more than the benchmark indices. Futures are trading at a discount to the spot.

The BSE Sensex is trading at 6,626 (up 20 points) and the Nifty is trading at 2,074 (up 5 points). The rupee is trading at Rs 43.75 per US Dollar.

Auto stocks continue to be at the receiving end in the last few days. Given the fact that the government is contemplating a price increase of petroleum products, demand for automobiles may slow down. Besides, if prices increase, there will be a significant impact on inflation. This could in turn push interest rates higher, albeit marginally. While one cannot rule out this possibility, investors should stick to those companies that have a diversified segment and geographic presence, if at all one chooses to invest in auto stocks. Bajaj Auto (BJAT.BO, news) is down more than 1%. Maruti is trading higher on the back of the capex announcement.

The US markets closed in the positive yesterday on the back of encouraging news from Alcoa and Dell. Given the fact that crude prices continue to rule higher (on a YoY basis), there is a sense of caution in the global markets. The earnings season in the US markets was kick started yesterday and is likely to be influenced by the same. As a results, volumes have been lower (similar to the trend witnessed in the Indian markets). Most of the Asian markets are trading in the positive region, barring Japan and Taiwan.

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