Markets edge higher; autos up, lenders mixed

Markets edge higher; autos up, lenders mixed

Mumbai: Shares were on track to log their fourth weekly gain in five weeks, but there were signs of fatigue as pessimism grew over the pace of economic recovery in the United States.

Automakers led the gains on Friday in anticipation of robust earnings from Tata Motors, the country’s largest truck producer whose products also include the UK-based premium Jaguar and Land Rover and the Nano, the world’s cheapest car.

By 10:53 a.m., the 30-share BSE index was up 0.15% at 18,199.93, with 17 of its components gaining, but trading was choppy.

The benchmark is up nearly 2% so far this week. For the year to date, it has gained 4.3%, outperforming the broader MSCI’s emerging markets index that has climbed 2.2%.

The rise has been helped by foreign portfolio investments of $11 billion this year, with India’s economy expected to expand around 8.5% — the second fastest pace after China among major economies.

However, subdued global markets after weak US jobless claims figures raised doubts over anaemic US economic recovery and is expected to keep investors on the backfoot.

“All the good news are factored in. Any untoward event overseas can hurt the market," said Kunal Sukhani, manager of institutional equities at Asian Markets Securities.

The 50-share NSE index or Nifty was trading up 0.2% at 5,458.65.

“There is fatigue in the market and there is strong resistance for Nifty at 5,550. We can see only stock-specific activity going on," Sukhani said.

Shares in Tata Motors, which reports results on Tuesday, rose 3.2% to 887.65 rupees.

The stock has gained 12% this year, lagging the sector index that has climbed more than 15%.

Tata Motors is expected to swing to a net profit of Rs0.98 crore for the June quarter from a loss of Rs330 crore a year ago, a Reuters poll of analysts showed. [ID:nSGE66L09V]

Top car maker Maruti Suzuki added 0.4%, extending the previous session’s gains after media reports the company may manufacture cars for German auto firm Volkswagen’s global market on a contract basis.

Leading utility vehicle maker Mahindra & Mahindra bounced back 1.4% after declining as much in the previous session.

Energy giant Reliance Industries extended losses on concerns its acquisitions would take time to produce results, traders said.

The company said on Thursday it would pay $392 million to take a 60% interest in a joint venture with Carrizo Oil & Gas, its third shale gas acquisition in the United States this year.

The stock, which weighs the most on the main index, was down 0.4%. It has shed close to 8% so far in 2010.

Financials were mixed as a hawkish monetary stance by the central bank took some shine off rising demand for loans.

Leading lender State Bank of India shed 0.3%, while rival ICICI Bank edged up 0.2%. Mortgage lender Housing Development Finance Corp climbed 1.2%.

In the broader market, gainers were more than double the number of losers on volume of 152 million shares.