Asian stock markets have opened the day on a mixed note with stock markets in Japan (up 0.5%), Hong Kong (up 0.4%) and Indonesia (up 0.3%) trading firm. However, markets in China (down 0.3%) and South Korea (down 0.2%) are facing selling pressure. The Indian stock markets have opened the day on a weak note. Stocks in the IT and auto space are leading the losses.
The BSE-Sensex is trading lower by 16 points (0.1%), while the NSE-Nifty is down by around 7 points (0.1%). BSE Midcap and BSE Small cap stocks are trading mixed with the BSE Mid cap index trading flat, while the BSE Small cap index is up by 0.2%. The rupee is trading at 50.55 to the US dollar.
Auto stocks have opened the day on a weak note with Tata Motors (Telco), Mahindra & Mahindra Ltd. (M&M) and Ashok Leyland trading in the red. Utility vehicle maker M&M has affirmed its plans to start manufacturing its new Sports Utility Vehicle (SUV) XUV 500 at its Chakan plant by expanding its manufacturing capacity. The Chakan factory is located near Pune in Maharashtra. M&M has the capacity to produce 2,500 XUV 500 per month. After increasing the capacity, it will be first able to produce upto 3,000 per month and later will increase the same as per the market demand. Due to the strong domestic demand the company is going quite slowly on the exports front. The company had received an overwhelming response for XUV 500 which made the company to stop further bookings.
Telecom stocks have opened the day on a mixed note with Reliance Communication and Bharti Airtel trading firm. However, Mahanagar Telephone Nigam Limited (MTNL) and Tata Communications are facing selling pressure. Reliance Communications announced that it has secured its funding through loans from a host of Chinese banks. This was to refinance US$ 1.2 bn of existing loans in the form of foreign currency convertible bonds (FCCBs). These FCCBs were due on March 1, 2012 for redemption. Reliance Communication, the number two telecom operator in India will be benefitted by this refinancing. The company has been trying hard to sell its tower business and raise funds to reduce its debt. The current outstanding debt stands at around US$ 6.5 bn. The banks that have refinanced the deal for Reliance Communications are said to be Industrial and Commercial Bank of China, China Development Bank Corp, Export Import Bank of China and other banks who had already funded the FCCBs for the company. The interest cost for the company will be less than 6%.