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Autos propel Sensex to a firm start in 2011

Autos propel Sensex to a firm start in 2011
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First Published: Mon, Jan 03 2011. 11 32 AM IST
Updated: Mon, Jan 03 2011. 11 32 AM IST
Mumbai: Shares were trading up 0.5% on Monday in a firm start to the New Year, powered by automakers that rallied on the back of robust December sales.
Firm Asian markets and hopes for continued foreign buying underpinned investor sentiment. Foreign funds had poured more than $29 billion into Indian equities in 2010 in their best ever annual investment and lifted the market 17.4%.
Tata Motors raced as much as 2.1% after posting a 31% jump in India vehicle sales, and it raised prices of some vehicles.
Leading utility vehicles maker Mahindra & Mahindra raced 2.2%, riding a 42% rise in sales last month.
By 10:24 am, the 30-share BSE index was trading up 0.5% at 20,611.33 points, with 24 of its components gaining.
“The momentum should continue. All eyes are now set on earnings numbers that start coming in next week,” Vaibhav Sanghavi, director of Ambit Capital said, pointing to strong economic and earnings growth prospects.
The BSE index is only around 600 points away from a record high seen in January 2008.
The manufacturing sector expanded at a slower pace in December than in the previous month, weighed down by a weakening growth in factory output and new orders, a survey showed.
But the December reading marked the 21st consecutive month that the key index of manufacturing in Asia’s third-largest economy has been above the reading of 50, which divides growth from contraction.
“Notwithstanding the deceleration from last month, these numbers are testament to the strong momentum in the manufacturing sector,” said Leif Eskesen, chief economist for India and Asean at HSBC.
Hero Honda rose 1.3% after the top motorcycle maker said its December sales rose by a third.
Patni Computer Services fell as much as 3.5% after US software company iGate said on Sunday it had cancelled a news conference scheduled for Monday, at which it was expected to announce a deal with Apax Partners for a majority stake in the Indian firm.
Financials climbed on optimism over loan demand in a fast-expanding economy.
Leading lenders State Bank of India, ICICI Bank and HDFC Bank firmed between 0.8% and 1.1%.
Metal producers were firm on bullish outlook for base metal prices in 2011, dealers said.
Sterlite Industries, Hindalco and Tata Steel were up between 1.2% and 2.6%. In the broader market, gainers were more than four times the losers on volume of 76 million shares.
The 50-share NSE index was up 0.5% at 6,166.10.
Stocks on the move
Hexaware Technologies rose as much as 5.1% to Rs122.20, its highest since October 2007, after the software services firm said its board would consider interim dividend and bonus issue on 11 January.
Indiabulls Financial Services was up 4.2% at Rs180.90 after the company which operates several financial services businesses said it had sold 26% stake in Indian Commodity Exchange to Reliance Exchange next.
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First Published: Mon, Jan 03 2011. 11 32 AM IST
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