PULL BACK

The Indian equity markets which pulled back slightly after a buoyant start, has edged higher again in the late morning session thanks to some strong buying in several front line stocks like RIL, Tata Motors, TCS, DLF and Sterlite Industries. Bargain hunting and short-covering after the previous session's sharp losses too contributed to the today's surge. Meanwhile, other Asian markets were also trading in the green while US index futures were also up marginally in the screen trade. Asian stocks rose after companies reported higher earnings and the US manufacturing expanded, boosting confidence in a global economic recovery. Receding worries about the unrest in Egypt also helped underpin demand for riskier assets. Back home, The BSE sensex and NSE Nifty were trading above 18,200 and 5,450 levels respectively. Meanwhile, most sectoral indices were in the green and the gains were led by Reality, Oil and Gas, IT, TECk and Metal stocks. The IT index rose 2.08%, rebounding after five straight loss making sessions.TCS up by 3.18%, Infosys up by 1.99% and Wipro up by 1.76%. The Small cap and Mid cap stocks were also trading higher. The market breadth on the BSE, however, remained in favour of advances; there were 1760 shares on the gaining side against 816 shares on the losing side, while 93 shares remain unchanged.

Airline stocks surged on the buzz of hike in airfares as fuel prices rose. Jet Airways up 4.29%, Kingfisher Airlines up 3.14%, Spicejet up 4.17%. There is a buzz that Airline companies are likely to raise airfares on the back of hike in prices of air turbine fuel by 3.5% by oil marketing companies on Monday. It is being expected that an increase of 5-7% in ticket prices may be impacted by the different Airlines. Airlines, which raised fares last month by 100-200 on increased fuel costs, are watching the situation very closely.

The BSE Sensex is currently trading at 18,239.96 up by 217.74 points or 1.21%. The index touched a high and a low of 18,306 and 18,133.19, respectively.

The BSE Mid-cap and Small-cap indices surged 0.72% and 0.82%, respectively.

All the BSE sectoral spaces were trading in the green, with an exception of Power down by 0.03%. Reality up 2.27%, Oil and Gas up 2.18%, IT up 2.08%, TECk up 2.02% and Metal up 1.31% were the major gainers.

Sterlite Industries up 3.33%, Tata motors up 3.20%, TCS up 3.18%, RIL up 2.86% and DLF up 2.83% were the major gainers on the Sensex.

On the other hand, Maruti Suzuki down 1.68%, HDFC down 0.95%, NTPC down 0.84%, Tata Power down 0.55% and HDFC Bank down 0.23% were the top losers on the index.

As the Indian economy continues to fire on all cylinders, the auto industry too has continued its dream run and entered into the 2011 on a strong note. Most of the auto makers have seen good growth in sales in the month of January, although some moderation compared to December is there as the base in case of former was much higher.

Market leader in the passenger car space Maruti Suzuki sold 109,743 units in January, up 15% from the year ago month. This includes domestic market sales of 100,422 cars. However, sales of Maruti could have been more as it started rolling out vehicles only from January 6, prior to which it had an annual plant maintenance shutdown. The company has said that no slowdown in demand was seen despite higher base of last year.

Tata Motors' passenger vehicles division also recorded strong growth with total sales of 32,386 units in the domestic market in January, up 14% compared with same month last year. However, the second largest car maker Hyundai Motor saw 17.7% drop in overall volumes while its domestic sales marked a marginal growth of 2.4% only. Both Maruti Suzuki and Hyundai Motor saw over 30% drop in export sales, mainly because of high base.

However, newer and smaller players continued to see staggering growth as a proof of India's rising appetite for four-wheelers. Ford India reported its best ever monthly sales with an over four-fold increase in its January sales at 10,026 units as compared to the same month last year. Volkswagen also saw its sales surging from just 383 units last January to 5,601 in January 2011.

The two-wheeler space was not behind either. Market leader Hero Honda, reported sales of 466,524 units, registering a jump of 19.68% compared with corresponding figure of 389,802 units for January 2010. Domestic sales of TVS Motors marked a growth of 30% with sales of 142,227 units in January compared with 125,578 units a year-ago. Yamaha Motors too managed nearly 28% jump in sales while the second largest player Bajaj saw 20% expansion in sales numbers.

Auto industry has been the biggest surprise in India's faster-than-expected recovery after being hit by the global downturn in late 2008. Not only did the industry recovered swiftly in 2009, but it has maintained a high growth trajectory throughout the 2010 as well. Some moderation is obvious in the growth at this stage as capacity constraints become more and more binding in short run and the high base effect from 2010 weighs on sales. However, the medium term growth trajectory of the industry has definitely gone up significantly over the last one year.

The S&P CNX Nifty surged 41.85 points or 0.77% to 5459.05. The index touched a high and a low of 5488.80 and 5438.70, respectively. 

The top gainers on the Nifty were TCS up 3.30%, Tata Motors up 2.96%, Reliance up 2.92%, Sterlite Industries up 2.82%, DLF up 2.03%.

The top losers on the index were PNB down 2.31%, HDFC down 1.92%, Maruti Suzuki down 1.80%, NTPC down 1.24% and Axis bank down 1.22%.

Other Asian markets are trading in the green. Hang Seng added 1.81%, Jakarta Composite gained 0.83%, Nikkei 225 advanced 1.78%, Straits Times jumped 0.83% and Seoul Composite increased 0.11%.