Stocks of Japan-based companies such as Maruti-Suzuki, Ricoh, Hitatchi Home Appliances, Motherson Sumi Systems, Asahi India, Sona Koyo Steering, Denso India, Honda Siel Power, Sharp India and Lumax Industries listed on the BSE and the NSE are likely to witness higher trading activity on the back of a weak yen. The Japanese currency hit its lowest level in more than two years against the US dollar on expectations of drastic monetary easing by the new administration. The Japanese yen hit a low of 86.64 against the US dollar, its lowest point since August 2010. In 2012, yen fell 12 per cent, its steepest drop since 2005. The yen also fell to a 17-month low against the euro at 114.66 and to a 20-month low against the Australian dollar. Weak yen bodes well for Japanese firms, as they are heavily depend up on export market.
Sales figures to drive auto, cement stocks
Automobile and cement sectors will be in focus this week at the bourses as they will disclose sales data for December 2012. If advance tax is of any indication, Mahindra & Mahindra and Bajaj Auto are likely to report better sales figures. According to reports, M&M's advance tax payment rose 42.51 per cent to Rs 295 crore in December quarter 2012 over December quarter 2011. Bajaj Auto paid Rs 470 crore compared to Rs 450 crore, while Tata Motors did not pay any amount against Rs 60 crore it had paid in the September-December quarter of last fiscal. Cement manufacturers should report better despatches as Ambuja Cement paid Rs 150 crore (Rs 113 crore) while ACC paid Rs 112 crore (Rs 95 crore).
NMDC and Sesa Goa shares may remain in focus as iron ore prices are trading at a seven-month high.
Iron ore prices gained momentum as China’s factory output and retail sales jumped for the last three months, signalling an economic recovery. Chinese ore imports reached 65.78 million tonnes in November, the second-highest level after a record 68.97 million tonnes in January 2011, according to Bloomberg. Stockpiles held at China’s major ports dropped 3.3 per cent to 71.32 million tonnes as of December 21, the lowest since September 10, 2010. The inventories, owned mostly by mills and traders in China, have dropped for eight straight weeks. Weekly inventories dropped to 73.81 million tonnes as of December 21, researcher Mysteel.com said on its web site. This will help NMDC and Sesa Goa that mine iron ore and export. However, gains will be limited for the latter, as some of its ore still face ban from State Governments.