Day Ends Negative, Autos Up On Potential Price Rise

The markets saw several ups and downs today, finally ending in losses. This downward movement resulted out of weakness in individual stocks. The Sensex ended the day lower by 31.88 points or 0.16% at 19355.26 and Nifty was down 10.80 points or 0.18% at 5888. Overall, the negative effect on equities was due to the positive IIP data, which dampened hopes of a rate cut by the RBI in its monetary policy review meet slated for Dec 18, 2012.

The Asian markets remained positive throughout the trading session, ending the day with gains in the range of 0.40%-0.80%. This was caused due to optimism around the resolution of the fiscal cliff.

The European stocks saw a flat to positive opening today, and have been continuing that trend. The FTSE and DAX are trading higher by 0.27% and 0.25% respectively. The CAC is currently flat, changed by -0.03%.

Domestically, although the broader indices ended the day lower, midcaps and smallcaps were relatively stronger. The BSE midcap and smallcap indices ended the day higher by 0.06% and 0.24% respectively. The market breadth was neutral, with 1433 (46.78%) advances and 1496 (48.84%) declines.

Of the 13 sectoral indices 6 ended the day positive. The highest gains were seen in the BSE Consumer Durables, Auto and IT indices, which rose by 0.95%, 0.94% and 0.38% respectively.

Due to growing reports about the possible upward revision of vehicle prices, automobile stocks saw significant buying. The upward momentum was supported by significant gains in the prices of Bajaj Auto, Hero MotoCorp and Mahindra & Mahindra, which saw their prices appreciating by 2.57%, 1.92% and 2.20% respectively.

In other developments, British Telecom has been gradually lowering its stake in Tech Mahindra. A sizeable amount of stake was offloaded today, which resulted in an upward movement in the stock price of Tech Mahindra. The scrip ended the day higher by 3.69%. The movement in this stock has also been responsible for the upswing seen in the BSE IT index.

UAE-based Etihad Airways has been in talks with Jet Air and Kingfisher Airlines for a possible investment in either of the companies. According to media reports, Etihad's executives are scheduled to meet both the domestic airlines’ top officials. The stocks of Jet Airways and Kingfisher Airlines saw an upward movement of 4.66% and 4.98% respectively.

The markets are currently focussing on domestic cues picked up from Parliamentary developments and macroeconomic data releases. Going ahead, the global cues are also likely to be tracked. Important global events that would affect tomorrow’s opening are the US Federal Reserve’s Federal Open Market Committee (FOMC) statement, the decision on interest rates as well as Fed Chairman Ben Bernanke’s speech.