Indian share markets continue to trade flat with a negative bias during the morning trade. Sectoral indices are trading on a mixed note with FMCG sector and capital goods sector leading the gains. Metal stocks and energy stocks witness the majority of the selling pressure.
The BSE Sensex is trading lower by 25 points and the NSE Nifty is trading lower by 9 points. The BSE Mid Cap index is trading up by 0.4% while the BSE Small Cap index is trading up by 0.6%. The rupee is trading at 64.43 to the US$.
Small caps have comfortably outperformed the Large caps and how.
Small Caps - Outperformers in Current Financial Year
Expectedly, valuations of certain Small cap companies have gone through the roof. It is important to understand the highly volatile nature of these stocks. In a downturn, these stocks tend to move in the opposite direction much faster as well.
While there, undoubtedly, lies hidden opportunities in the small cap space, it is important to focus on fundamentals of these stocks. Next, assess if they have the potential to move on to the 'Safe stock' category in the future.
In news from automobile sector, as per a leading financial daily, Mahindra & Mahindra (M&M) has entered into a strategic partnership with Renesas, a supplier of advanced semiconductor solutions, under which the latter will become the official technology partner for its Formula E team while also working together on electric racing and road cars.
Through this partnership, both the companies will leverage their mutual strengths to expand the development and manufacturing of electric vehicles (EVs), powertrain, advanced driver assistance systems, and other systems in India and other emerging markets.
This will be in line with Mahindra's 'race to road' story of the electric vehicle development that the Formula E platform delivers.
M&M is looking forward to leveraging on the automotive semiconductor expertise of Renesas as it increases thrust in Formula-E and continue to play a pioneering role in the fast-growing Indian EV market.
Renesas Electronics Corporation Executive Vice President Ryuji Omura said India is one of the company's focus markets and is expected to bring about significant business growth for it, particularly for the EV segment.
M&M share price was trading up by 0.5% at the time of writing.
In another development, Bajaj Auto's Qute is reportedly all set to debut in India following a draft notification issued by the Ministry of Road Transport and Highways, which has approved the quadricycle as a vehicle category.
The 216cc Qute could hit the roads by this fiscal-end after a wait of over five years since it was first showcased as the RE60 at the 2012 Delhi Auto Expo. The next step would be for the quadricycle to undergo testing by the Automotive Research Association of India for its roadworthiness as is the norm for all vehicles.
The Qute's entry has been delayed for years now owing to a slew of public interest litigations filed in various high courts objecting to its use on roads. The Supreme Court then stepped in to hear the matter while staying all the objections filed in the other courts.
Bajaj Auto share price was trading on an encouraging note (up 0.2%) on the BSE.
In news from the economy, reacting to the strong September quarter GDP numbers, Finance Minister Arun Jaitley has said the rise in GDP growth rate to 6.3% in the July-September period of 2017-18 signals a reversal of downtrend witnessed over the preceding five quarters.
He added that the deceleration in overall growth witnessed since the first quarter of the last fiscal has been reversed and the impact of two significant reforms -- demonetisation and rollout of the Goods and Services Tax (GST) -- is "behind us", and the country can now look forward to upward growth trajectory in the coming quarters.
Jaitley further said that India had standardized itself for a growth rate of seven-eight percent. Outlining the economic roadmap for the government, he said "India, in the last three years, for the first time in history, has been the fastest-growing major economy and we do hope that in the first instance we evolve into a middle-income economy and subsequently graduate into a developed economy."
Observing that inadequate infrastructure is a major hindrance in the growth, he said if we have to aspire to reach this, India will need to upgrade infrastructure over the next two decades. We need a lot of investment and we will need a lot of spending. He added that the government has been increasingly raising allocation for development of the sector.
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