Auto sales growing 9.8% in all segments in April

Finally something to cheer for the auto industry!!! The beginning of the current financial year seems to be good for the domestic automotive industry. For the first time since April last year, all the segments have recorded a healthy growth. Car segment witnessed a jump of more than 17 per cent, while sales in the utility vehicle segment rose by 31 per cent, Multi purpose vehicles grew by 48% albeit on a smaller base, two wheeler sales grew by 8 per cent, as compared with the corresponding month last year.

The two-wheeler industry was the worst-hit last fiscal, posted an 8 per cent increase in sales compared with the corresponding period last year. The marriage season this year started earlier resulting in higher sales volumes, especially in the entry-level two wheeler segment last month. But the dispatches for May are likely to fall as interest rates continue to move up. So April figures cannot be seen in isolation to come to a conclusion that sales will pick up. Hero Honda reported an 8 per cent increase in sales at 2,76,580 units, followed by the second largest player Bajaj that sold 1,38,117 units, clocking a 9.18 per cent growth during the month against the corresponding period the previous fiscal.

Maruti posted an increase of 22 per cent at 51,766 units. Hyundai at 21,492 units recorded a 36.91 per cent growth as demand for its premium hatchback i10 continued to be high. Last month, most of the manufacturers such as Maruti and Hyundai had indicated that they were watching the steel price and depending on the rise in input costs, the companies would take a call on hiking their prices. This also led to higher volumes last month.

The commercial vehicles industry, which had started showing recovery since the last few months, also reported encouraging numbers with both the light and medium and heavy commercial segment sales on a high. Unlike in the case of cars, which are a luxury and a personal commodity, there is a return one gets on the purchase of commercial vehicle due to which even if the interest rates move up, it does not affect the sales so much. The medium and heavy commercial vehicles segment grew 5.28 per cent to 18,608 units and the light commercial vehicles sales rose 10.74 per cent to 14,663 units, said the SIAM data.

Indian Inflation at 7.61%, 3-½ Year High

Indian annual inflation rose to a 3-½ year high of 7.61 percent in late April, prompting the finance minister to pledge that the government would take more action to tame prices if needed. Wholesale inflation (WPI), the country's most closely followed measure of price trends, has more than doubled since November as India, like other countries globally, saw its import bill for oil and food prices soar.

In the latest reported week, though, inflation has not shown any significant spurt as compared to earlier week (7.57%), actual inflation estimates could be much higher. The consistent upward revisions in the final inflation numbers by the Government since end-January have been fuelling speculation that actual inflation estimates, which come in with a lag, will be way above what the provisional figures suggest. The gap between the provisional and final figures widened to 110 basis points for the week ended March 1 the latest week where final data has been made available. Since the provisional wholesale inflation data comes out first, it effectively emerges as the most closely followed measure of price trends in the country, while the final numbers, by virtue of being backdated, pretty much go unnoticed.

The fiscal and trade measures taken by the government should start having an impact in the coming weeks. Particularly the cut in steel prices announced by steel producers should reflect in the index. The government is in the process of persuading the cement companies to roll back prices and expects inflation to moderate once the various measures kicked in.

The central bank has also stepped in to try to control price rises, however there is a limit to what it can do, largely because inflation stems from supply constraints not domestic demand. Last month, the Reserve Bank of India (RBI) announced a 25-basis-point increase in the cash reserve ratio (CRR) to 8.25 percent, its highest level in seven years.

Recent moves by the government and the central bank to boost supplies and curb inflation would pay off but not immediately. With oil prices still firm, we expect the WPI index to remain above 7 percent in the coming weeks.

Black Monday ???? - Stock Market Prediction for 12th May 2008

Market may open down with hugh gap. Market would be volatile & show significant ups and down. Market may up between 09.57 and10.20. Market may steady or up side between 13.00 and 13.25. Market may close at down to previous closing.



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Do not Buy any thing for 3 to 4 Days, exit all long positions.


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RELIANCE - Reliance Industries Ltd
RPL - Reliance Petroleum Limited
ICICIBANK - ICICI Bank Ltd
RNRL - Reliance Natural Resources Limited
APOLLOTYRE - Apollo Tyres Ltd
DRREDDY - Dr. Reddy's Laboratories Ltd.
MARUTI - Maruti Suzuki India Limited
PFC - Power Finance Corporation Limited
RAJESHEXPO - Rajesh Exports Ltd.
SATYAMCOMP - Satyam Computer Services Ltd

Technical Analysis for 12th May 2008

BSE-SENSEX - Major Support - 16707, 16568, 16484, 16399, 16176, 15952, 15729
BSE-SENSEX - Major Resistance - 16846, 16931, 17015, 17154, 17293, 17517, 17740

NSE-NIFTY - Major Support - 4975, 4938, 4916, 4894, 4835, 4776, 4717
NSE-NIFTY - Major Resistance - 5012, 5034, 5056, 5093, 5130, 5189, 5248