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Thursday, 11 December 2014

Sensex, Nifty consolidate; midcaps, smallcaps outperform

10:40am Interview

The festive season was a disappointment and the outlook for the automobile industry is likely to remain grim for this year, says RC Bhargava, chairman, Maruti Suzuki.

According to the auto industry veteran, the worst is not yet over for the sector. He, however, admits that the growth in November picked up though whether it will be sustainable or not is yet to be seen. 

Speaking to CNBC-TV18, Bhargava adds that though exports have increased substantially, they may not salvage the growth for the entire sector as the total volume of exports is still a very small part of the production.

The current fall in crude prices to below USD 65 per barrel level is a positive for the company as it reduces the cost of production significantly.

10:20am Market Expert

Crude is the big theme that will drive market trend in the near to medium term, says Raamdeo Agrawal, Joint MD, Motilal Oswal.

In an interview to CNBC-TV18, he says that falling crude is a bigger theme than even the change of government at the centre earlier this year.

“Provided the fall in crude prices is sustainable and not just a one-quarter phenomenon,” Agrawal added as a caveat.

He sees petrochemical companies posting huge losses in the September quarter because of the steep decline in their inventory of crude. However, it will fire up the earnings of many companies whose raw material prices are linked to crude.

Agrawal says it will give a big boost to the earnings of consumer companies as it will be upto them to decide how much of the benefits they would like to pass on. Commodity companies will have no such advantage as they will have to pass on the fall in commodity prices.

10:00am Market Check

The 50-share NSE Nifty managed to hold the 8300 level amid consolidation, up 13.45 points at 8306.35 while the Sensex rose 35.56 points to 27637.57. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising more than 0.5 percent.

More than two shares advanced for every share declining on the Bombay Stock Exchange.

Telecom stocks like Bharti and Idea Cellular rebounded, up 1-2 percent as the defence ministry agreed to release 5 MHZ of spectrum in the 2100 MHZ which is likely to be auctioned next year. Also a proposal to swap 5 MHZ spectrum in 2,100 MHZ band, with similar quantity in 1,900 MHZ band is currently underway. This increased supply will reduce the pressure on telecom companies bidding for 900 MHZ.

Onmobile Global gained 5 percent as the board approved a buyback of upto Rs 49 crore worth of shares at a maximum price of Rs 86 per share which is a 20 percent premium to current price.

Exide Industries climbed over 1.5 percent as Citi upped target price to Rs 200 from Rs 193 earlier, citing decline in lead costs.

Bharat Electronics gained 1 percent as Russia and India signed pact to manufacture nuclear and defence parts in India.

IL&FS Engineering shot up 10 percent after its subsidiary Maytas Infra Saudi Arabia bagged an order worth Rs 464 crore contract in Saudi Arabia with a completion period is 32 months.

Pricol climbed over 7 percent as it proposed to acquire 99.99 percent stake in a Brazil-based auto component manufacturing company through its wholly-owned subsidiary in Spain. This acquisition will help to make it enter the Brazilian auto component industry. Pricol said the acquisition is expected to be completed by the end of January 2015. More information please visit this site

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