The Indian markets continued to hover around the dotted line during the previous two hours of trade. However, although the BSE-Sensex is trading in the neutral territory, almost all the sectoral indices are trading in the green led by the BSE-Realty, BSE-Metal and BSE-Capital Goods indices. The BSE-Auto Index is the sole loser at the moment.
The BSE-Sensex is currently trading higher by about 30 points, while NSE-Nifty is trading higher by about 15 points. Stocks from the mid and smallcap spaces seem to be in favour as the BSE Midcap and BSE Small cap indices are both up by 0.4% and 1% respectively. The rupee is trading at 45.45 to the US dollar.
Hotels stocks are trading mixed with EIH and other small hoteliers like Kamat Hotels, Advani Hotels trading firm whereas Indian Hotels and Hotel Leela were trading weak. EIH, which operates the Oberoi and Trident brands of hotels and resorts, plans to raise Rs 11,788 m via rights issue of around 178 m equity shares. The company intends to utilize the proceeds toward development of its properties and will also use a portion of the issue to pre-pay some outstanding debt. The company has fixed the rights entitlements at 5 equity shares for every 11 equity shares held on the record date Feb 22, 2011. The issue price has been fixed at Rs 66 per equity share.
Auto stocks are currently trading weak led by M&M, Ashok Leyland, Tata Motors and Maruti Suzuki. A leading business daily has reported that auto major Tata Motors is looking at redrawing plans for its distribution alliance with Italian car major Fiat. The two companies had entered into an alliance way back in 2006. As part of the deal, Tata Motors had received rights to distribute Fiatís vehicles in India. However, the alliance has failed to live up to its expectations and thus, the reason for this development. That both the companies are not happy with the performance of this alliance is not new information. In fact, news related to the same has been making rounds for a while now.
It is believed that Tata Motors sold 24,752 Fiat-branded cars in FY10. However, during the 9mFY11 period, only 17,000 cars have been sold from the Fiat stable. These lower volumes have come in at a time when auto sales in India have increased tremendously. On the back of lower volumes, both the companies have decided to redraw strategies in order to boost sales. It must be noted that news related to Fiat looking at opening its own standalone showrooms have been making rounds. But there has been no confirmation on part of both the companies.