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Thursday March 9, 02:30 PM
Cautious undertone... |
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By Equitymaster.com
Though markets recovered some of the lost ground during the previous trading hour, profit booking in select heavyweights seems to continue. Currently buying is being witnessed in cement stocks, while telecom, pharma and power stocks are evincing mixed interest. Stocks from other sectors are trading weak currently.
The BSE Sensex is trading at 10,469 (down 39 points) and the NSE Nifty is trading at 3,100 (down 17 points). The rupee is trading at 44.49 to the dollar.
Auto stocks are trading weak with Tata Motors (4%), Maruti and Hero Honda (HROH.BO, news) (each down 3%) being the biggest losers. As per a leading business daily, Bajaj Auto (BJAT.BO, news) , the second largest two-wheeler player in the country is planning a foray in the four-wheeler segment. For this purpose, the company is looking at a greenfield facility at Waluj, Pune, where it has its existing plants. The company has planned to foray into light commercial vehicles (LCVs). However, as the project will take atleast two to three years to start commercial production, in the medium term there will be no benefit accruing to the company. On the other hand, increase in depreciation will impact the bottomline of the company. The stock is currently trading marginally weak.
Except for SBI (up 1%), banking stocks are out of favour currently with HDFC Bank (HDBK.BO, news) and OBC (each down 1%) taking the lead. As per the leading business daily, HDFC Bank is aiming to double its advance portfolio in the personal loan segment in the next financial year. Currently, the segment accounts for around 30% of the loan assets of the bank and has grown by around 70% in 9mFY06. Similarly, the bank is also planning to increase its credit card business significantly. Currently it has a base of 2 m credit card holders and around 20% of the business is contributed by credit cards. However, a cause of concern is the lion-share of the auto loans in the total portfolio. Excessive exposure to any of these high-risk categories, without commensurate yields and risk coverage, pose delinquency and margin concerns for the bank going forward.
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