Semiconductor shortage subsides; D-street waits for auto fireworks -

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By S Jha

New Delhi, October 30: The global equity market cues are likely to set up the Indian stock markets on firm footings. After the third quarter number in the US, which gave stronger than anticipated growth, set off the Dow Jones rally, the Navratri-Diwali consumer data in India may cheer the bourses, for enough hints are available that demand in the economy is making a strong comeback.

Dow Jones had closed with a gain of over 800 points on Friday. Sensex and Nifty had closed with minor gains ahead of the policy meeting of the Reserve Bank of India. All eyes would be on the commentary of the RBI for inflation mapping, while there are suggestions that the people have ignored the higher interest rates following back to back rises in the Repo rates to buy higher number of passenger vehicles and also the housing units.

The bourses on Friday seemed to have the sense of the Diwali data of the numbers of cars and two-wheelers sold as most of the scrips led by Maruti had rallied. The likes of Mahindra and Mahindra, Hero MotoCorp, Bajaj Auto, Eicher Motors had all logged in handsome gains.

The automobile sector has reportedly registered an almost 11 per cent rise in the sales of the four-wheelers and two-wheelers during the festive season in contrast to the figure of the last year. Reports suggested that the sales of the four-wheelers have outpaced the two-wheelers, while productions have also been significantly higher in a confirmation that the shortage of semiconductor which had hit the automobile sector has subsided. The cars dealers association has said that over 14,60000 car units were sold in the festive season. Two-wheelers sales data too showed that over 17,35,200 units were sold.

There are also suggestions from the sectoral associations that a higher number of housing units have been booked by the people during the festive season. This is despite the fact that the home loans, even those which are MCLR-linked, have significantly gone up since the Russian invasion of Ukraine fueled the global inflation sending the Central Banks globally on a frenzied rate hikes.

While the traders have turned cautious on banks ahead of the RBI meeting, the auto-sector and real-estate scrips have come under the watch list of the market participants. The foreign institutional investors on Friday had also aggressively bought into the Indian equity market with a net buy of over Rs 1600 crores.