India Markets Thursday Wrap-Up: Infy, SBI Lead the Losses

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 |  Includes: INFY, TTM
by: Equitymaster

Although the markets did make an attempt to go into positive territory during the second half of the day, all such attempts were thwarted leading to yet another negative day on the bourses today. The BSE-Sensex lost in the region of around 130 points whereas the NSE-Nifty lost around 30 points.

The BSE Midcap and BSE Small cap indices weren't spared either as both of them closed lower by around 0.1% and 0.9% respectively. Advance to decline ratio on the Sensex was rather surprisingly evenly split today with one heavyweight declining for every one that ended in the positive. However, it was the decline in counters like Infosys (NASDAQ:INFY) and SBI that made all the difference to where the Sensex eventually settled at.

While most Asian indices ended in the red today, Europe too has opened on a negative note. The rupee was trading at Rs 45.7 to the dollar at the time of writing.

Bucking the trend of its other auto sector counterparts, Tata Motors (NYSE:TTM) traded strong today and closed more than 2% higher. The optimism seemed a result of the company bagging an order from a logistics firm for the supply of 250 'Tata Prima' trucks. While the company has not disclosed the value of the order, the deliveries are likely to be completed over the next two years. It should be noted that Tata Prima range of products were first launched in November 2009. It has been jointly developed by Tata Motors and its Korean subsidiary and also the Tata Motors European Technical Centre plc in the UK.

Infrastructure was another space where a lot of positive action was witnessed today. Chief gainers were Lanco Infratech, GMR Infra and Reliance Infra. While there was no positive news of note coming out from the sector, the strong surge in these counters seemed a result of bottom fishing by investors as the infra space was really beaten badly in the past few trading sessions. As far as our view is concerned, we believe that infrastructure is too wide a word and hence, profitable long term stock picking needs us to first whittle down the name to more specific sectors. And now, the ideal way to play this story we believe would be to invest in companies that are price seekers rather than price takers. In other words, the companies should have an uncomplicated business model and should have a track record of strong profitability as well as a sound balance sheet. It should be noted that infra is a long gestation sector and hence, utmost caution has to be exercised while picking long term winners.