Share markets in India are trading higher today after data showed the country's annual retail inflation eased slightly in August, against expectations.
India's retail inflation in August stood at 6.69%, which was lower than the 6.73% recorded in July, but it remained above the upper end of the Reserve Bank of India's (RBI) medium-term target for the fifth straight month.
Positive global cues also helped lift the sentiments.
The BSE Sensex is trading up by 198 points, up 0.5%, at 39,000 levels.
Meanwhile, the NSE Nifty is trading up by 61 points.
Bajaj Finance and Sun Pharma are among the top gainers today. ITC, on the other hand, is among the top losers today.
The BSE Mid Cap index is trading up by 0.8%. The BSE Small Cap index is trading up by 1.2%.
On the sectoral front, gains are largely seen in the healthcare sector.
US stock futures are trading higher today, indicating a positive start for Wall Street indices.
Nasdaq Futures are trading up by 47 points (up 0.4%), while Dow Jones Industrial Average Futures are trading up by 79 points (up 0.3%).
The rupee is currently trading at 73.40 against the US$.
Gold prices are currently trading up by 0.5% at Rs 51,933.
Even with the recent volatility in prices, gold and silver remain among the best-performing commodities this year to combat the fallout from the coronavirus pandemic. Earlier, gold had hit a record high of Rs 56,191 in Indian markets amid a global rally.
In news from the automobile sector, Tata Motors has ramped up monthly production to 16,000-18,000 cars for the coming months, three people aware of the company's production schedules said.
Yesterday, it was reported that Tata Motors has initiated the process of selling stakes in units Tata Technologies and Tata Hitachi Construction Machinery Co. as part of its ambitious plan to turn debt-free in three years.
The intent is to monetize non-core assets and the exercise has begun with these two companies.
In other news, Toyota Motor Corp. said that it won't expand further in India due to the country's high tax regime.
Reports state that this is a blow for Prime Minister Narendra Modi, who's trying to lure global companies to offset the deep economic trouble brought on by the coronavirus pandemic.
The government keeps taxes on cars and motorbikes so high that companies find it hard to build scale, said Shekar Viswanathan, vice chairman of Toyota's local unit, Toyota Kirloskar Motor.
The high levies also put owning a car out of reach of many consumers, meaning factories are idled and jobs aren't created, he added.
In India, motor vehicles including cars, two-wheelers and sports utility vehicles (although not electric vehicles), attract taxes as high as 28%.
Toyota, one of the world's biggest carmakers, began operating in India in 1997. Its local unit is owned 89% by the Japanese company and has a small market share of 2.6% in August versus almost 5% a year earlier.
India is planning to offer incentives worth US$ 23 billion to attract firms to set up manufacturing, people familiar with the matter said last week, including production-linked breaks for automakers.
Note that international automakers have struggled to expand business in India. General Motors quit from India in 2017 while Ford Motor agreed last year to move most of its assets in India into a joint venture with Mahindra & Mahindra after struggling for more than two decades to win over buyers.
Automobile sales in India were witnessing a slump before the coronavirus pandemic, with at least half a million jobs lost. A lobby group has predicted it may take as many as four years for sales to return to levels seen before the slowdown.
The biggest players are Maruti Suzuki and Hyundai Motor Co., which have cornered the market for compact, affordable cars.
Speaking of the automobile sector, have a look at the chart below which shows the performance of BSE auto index for the month of September since inception.
The BSE auto index ended in the red on only 3 out of the last 15 years for the month of September. That's a success ratio of 80%.
The auto index has entered the greed phase in September 2019 and will stay there until December 2021. This means there is still a lot of fuel left for auto stocks.
How automobile stocks perform in the coming months remains to be seen. Stay tuned for more updates from this space.
Moving on to news from the pharma sector, JB Chemicals is among the top buzzing stocks today.
Shares of the company rallied 16% to hit an all-time high of Rs 965 on the BSE, a day after the company reported a 92.6% year-on-year (YoY) jump in its consolidated net profit at Rs 1,194.2 million for the quarter ended June 2020 against Rs 620 million profit in the year-ago period.
Revenue came in at Rs 5,222.8 million, up 17% against Rs 4,461.1 million in the corresponding quarter of the previous fiscal.
Total income rose 18.7% YoY at Rs 5,449.7 million.
EBITDA rose by 61.9% YoY and stood at Rs 1,554.1 million in Q1FY21.
JB Chemicals share price is presently trading up by 11%.
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