Indian Markets Tuesday Wrap-Up: Bajaj Auto's Plans to Boost Sales

by: Equitymaster December 02, 2008 | about stocks: EPI / IFN / IIF    

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Markets staged a recovery to close the day just below the dotted line during the final hours of trade. While select stocks from the realty and FMCG sectors garnered investors' interest, selling pressure was seen in stocks from the auto, energy and consumer durables sectors. On the global front, the Asian indices closed weak, while the European indices too are trading in the red currently.

The BSE Sensex closed 80 points lower, while the NSE Nifty closed lower by 20 points. The BSE Midcap and Smallcap indices closed in the red, down by 1.4% and 1.3% respectively. The rupee was trading at 50.15 to the dollar.

Taking cues from its global peers, Indian benchmark indices too opened in the red and continued to languish in the red throughout the day. However, bouts of buying and selling activity were witnessed during the day. Even though the indices recovered from their day’s lows during the final hours of trade, they failed to close above the dotted line. The overall market breadth was negative with losers outnumbering gainers by a ratio of 1.6 to 1 on the BSE. M&M (down 8%) and TCS (down 6%) led the pack of losers on the BSE today.

Bajaj Auto is planning to launch one new model every month from January 2009 for six months. The current scenario of waning consumer demand and high interest rates has meant consistently sagging sales for Bajaj. The company’s sales fell almost 37% for the month of November. Also, group firm, Bajaj Auto Finance is offering a retail finance scheme to buy Bajaj's vehicles at an interest rate of just under 8%. These measures will help the company stimulate demand for its vehicles which will help the company to boost sales. It may be noted, however, that spending on new product launches can negatively impact the margins of the company. The stock of Bajaj Auto ended the day lower by 2%, while its peer TVS Motor ended higher by 3%.

L&T’s Building and Factories Operating Company, which is part of its Construction Division, has won an order worth Rs 14.5 bn for the construction of IT and office space buildings. These orders have been received from big companies like TCS and Godrej Developers. It may be noted that the company has a significant presence in the segment of design-and-build projects for airports, IT parks and commercial space. The company’s E&C division contributes nearly 75% of its revenues. These orders would further strengthen the company’s position in this segment. Engineering stocks ended the day on a weak note. While the stock of L&T closed lower by 4%, ABB ended the day flat.

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This article has 2 comments:

  •  
    Dec 03 03:04 AM
    Bombay Stock Exchange and National Stock Exchange was closed on Thursday after the attacks, which killed 101 people and brought the security forces into two luxury hotels in south Mumbai.

    Aaron Lee Smith, MD of Superfund Financial mentions a rally coming soon but downside risks are there and eventually stocks are a dangerous place to be in.

    www.youtube.com/watch?...
    Reply | Link to Comment
  •  
    Dec 12 03:16 AM
    Elliottwave says India is a buy. Indian market tested the bottom twice in last few weeks and is rising now. Stocks do react to news. Buy an index fund like EPI or Mindx and just play the trend with a basket of stocks.
    Reply | Link to Comment
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