Tuesday April 10, 11:30 AM
Volte-face... |
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By Equitymaster.com
Caution remains the buzzword in today's trade, as witnessed by the lacklustre performance of the benchmark indices during the first two hours of trading. Select stocks from the steel, power and FMCG sectors are currently garnering favour. However, selling pressure is seen mounting on stocks from the software, banking and telecom sectors. The overall market breadth is positive with the advance to decline ratio poised at 1.9 to 1 on the NSE.
The BSE Sensex is trading at 13,178 (no change) while the NSE Nifty is trading at 3,834 (down 9 points). The rupee is trading at 42.89 to the dollar.
Automobile stocks are currently trading firm with LML (8%), Escorts (6%) and Tata Motors (2%) being the major gainers. According to a leading business daily, Bajaj Auto (BJAT.BO, news) on Monday inaugurated its Uttarakhand plant that has a planned capacity of 1 m motorcycles per annum, which the company targets to achieve by October 2007. The Rs 7 bn plant has been set up with an investment of Rs 1.5 bn by Bajaj Auto and the remaining been funded by its 16 vendors. The company will initially manufacture the 100cc bike - Platina - with new rollouts in the executive segment being planned by the second quarter of the current fiscal. The company desires to shift its customers from the 100cc segment to a new segment by introducing bikes that have a higher power but are priced close to the 100cc segment bikes. The company also announced its plans to foray into the four-wheeler cargo segment with a launch being planned for 2009. The stock is currently trading 1% down.
Telecom stocks are trading a mixed bag with VSNL (2%) and MTNL (1%) being the major gainers. On the other hand, Reliance (RELI.BO, news) Communication and Tata Teleservices Maharashtra (both down marginally) are trading in the red. As per an announcement from Reliance Communication (RCom), the company has added a net of over 1.2 m customers for the month of March 2007, thereby taking its total subscriber base in excess of 30 m. The company has also completed its re-verification exercise (as was stipulated by Department of Telecommunication) for about 85% of its subscriber base. The company has also reported that the de-activated customers had not contributed much to its revenues and as a result they will not materially impact the company's revenues or profitability. In fact, owing to the deactivation of these customers, the company expects a 12% increase in its ARPUs as revenues will now be divided over a smaller subscriber base.
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