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Midcap and Small caps to lead upsurge

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Markets began the last week with big gains on Monday and then traded in a narrow range, gaining on four of the five trading sessions.

The BSE SENSEX gained 345.65 points or 0.83 percent to close at 41,945.37 points while NIFTY gained 95.55 points or 0.78 percent to close at 12,352.35 points. The broader market saw BSE100, BSE200, and BSE500 gain 0.98 percent, 1.22 percent and 1.44 percent respectively.

The breadth of the market rose very sharply with BSE MIDCAP gaining 3.63 per cent and BSESMALLCAP gaining 3.97 percent. This kind of gain in Midcap and Smallcap indices has happened after a very long time.

The Indian Rupee was volatile and lost 14 paisa or 0.20 per cent to close at Rs 71.08 to the dollar. Dow Jones hit yet another lifetime high and gained 524.33 points or 1.82 percent to close at 29,348.10 points.

Result season is off to a good start with first Infosys declaring a decent set of numbers and now Reliance Industries and HDFC Bank. While the bank has reported a growth of 12.7 per cent in net interest income, it reported a jump of 15.6 percent in profit before tax and 32.8 per cent in net profit at Rs 7,416 crore. The only point of concern was Gross NPA’s which rose by 4 basis points to 1.42 percent and 23.2 percent to Rs 13,427 crore as an absolute number.

Market is expecting changes in DDT or Dividend Distribution Tax with the same likely to be shifted to the recipient instead of the giver. Further, there are expectations that there would be changes in individual taxes with the rates and slabs changing. Also, some of the deductions available to individuals may be removed or substantially altered.

The gold monetisation scheme has somehow not taken of with the vast majority of individuals worried that their conversion under the scheme would attract the attention of the tax authorities and lead to complications. Considering the high stakes involved where India’s holding of gold is estimated at between 25,000-30,000 tons, the government needs to be innovative and bold in tweaking the scheme. They need to allow a housewife or lady to convert 500 grams of gold without asking for details. This would free up a large amount of gold and ensure that India does not need to import the annual approximately 600 tonnes of gold which is our domestic demand for many years to come. This would be a big relief to our trade deficit and would indirectly help in also strengthening the Indian currency.

The open interest in the market continues to be healthy and even though we have been on a buoyant note, the positions have not risen or changed dramatically. We are in no imminent danger of being either overbought or oversold. This is a very healthy indication that nothing dramatic in the market is to happen in the immediate short term

The week ahead would see the benchmark indices scale new peaks. These however would not be big jumps but of a more measured and laboured move. The action would continue like the previous week in the Midcap and Smallcap space where there would be a larger number of stocks performing. This would keep marketmen and investors happy.

The strategy would be to ride the wave and pick stocks from the Midcap and Smallcap space where all the action is currently focused. While the large cap stocks had seen lot of traction in the BFSI space, this sector took a breather last week and would be ready for another round of up move before the week is over.

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Hyundai bets on diesel models, launches Tucson SUV

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Chennai, July 14 : The second largest car maker in India Hyundai Motor India Ltd while continuing to bet on diesel powered vehicles is also looking at faster demand recovery from tier 2/3 cities, said a senior official on Tuesday.

Hyundai Motor also launched its new premium sports utility vehicle (SUV) Tucson for the Indian market.

Speaking to reporters, Tarun Garg, Director (Sales, Marketing and Service) said the timing of Tucson’s launch is right as there are over five lakh Creta buyers in the country who are looking for an upgrade to a premium SUV.

The new Tucson’s starting price is about Rs 22 lakh.

“With over 6.5 million customers worldwide, Tucson is one of the best-selling SUV’s across the world,” S.S. Kim, Managing Director and CEO told reporters.

He said the model was unveiled at the Auto Expo 2020.

Garg said the booking for diesel engine models are growing and the demand is across the country and more so from tier 2/3 cities.

He said when the fuel prices go up, buyers will look at fuel economy and diesel engines are fuel efficient.

According to Garg, Hyundai Motor has got over 45,000 bookings for its SUV Creta model and 56 per cent of that are for diesel engine variant.

Similarly, one third of the booking for Venue and Verna are for diesel models, Garg said.

“SUV lovers want much more than the fuel economy which diesel vehicles offer. It appears demand will stablilise at this level. There is also good demand for petrol models,” Garg added.

Queried about the pay cuts implemented by various companies and its impact on buyers scaling down their model preference Garg said he is not seeing any such trend.

According to him, buyers prefer to come to the showroom to take delivery of new cars even though Hyundai Motor offers to deliver the car at their door step.

Garg said it is not possible to predict the likely sales for 2020 as some states have Covid-19 lockdown restrictions.

He said the company is watching the market behaviour on a monthly basis.

Garg said during June 2020, the company has reached 75 per cent of June 2019 demand figures, In July 2020 the car maker plans to touch 90 per cent of July 2019 levels.

On the availability of components as the company is planning to start third shift in its plant Garg said the localisation levels are very high and the dependence on components from China is very low.

According to Garg the company’s supply chain is ready to meet the demand for increased components as third shift production is soon to start.

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No lay-offs by Wipro amid crorona crisis, no such plan

The Bengaluru-headquartered IT behemoth employs more than 1.75 lakh people in several countries across the globe.

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Azim Premji Wipro

Bengaluru, July 13 : Global software major Wipro has not laid off any employee during the Covid-19 pandemic nor has any such plan at the moment, a top company official said on Monday.

“I just want to give comfort and say this categorically that we have not laid off a single employee as the pandemic unfolded,” Wipro Chairman Rishad Premji said at the company”s 74th annual general meeting (AGM) held virtually.

“At the moment, we have no plans to lay off anybody at the company,” he said, replying to a female shareholder.

“We are trying to drive cost deductions through various other means operationally and otherwise,” said Premji.

The Bengaluru-headquartered IT behemoth employs more than 1.75 lakh people in several countries across the globe.

–IANS

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Google to invest Rs 75,000 crore to boost digitisation in India

The investment will focus on four areas important to India’s digitisation– first enabling affordable access to information to every Indian in their own language.

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Sundar Pichai

New Delhi, July 13 : Google CEO Sundar Pichai on Monday announced a Google for India digitisation fund through which, the company will invest Rs 75,000 crore or approximately $10 billion over the next five to seven years to help India go digital.

“We will do this through a mix of equity investment, partnerships and an operational infrastructure ecosystem in India. This is a reflection of our confidence in the future of India and its digital economy,” Pichai said during the Google for India virtual conference.

The investment will focus on four areas important to India’s digitisation– first enabling affordable access to information to every Indian in their own language.

“Second, building new products and services that are deeply relevant to India”s unique needs. Third, empowering businesses to continue or embark on digital transformation. And fourth, leveraging technology and Artificial Intelligence for social good in areas like health, agriculture and education,” the Google CEO said.

India’s Union IT Minister Ravi Shankar Prasad were also present during the conference.

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