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After opening the day in the green, the Indian indices witnessed volatility and booked some losses. Presently they are trading on a negative note. Sectoral indices are trading on a negative note with stocks from the healthcare, telecom and capital goods sectors leading the losses.
The BSE Sensex is trading down 77 points (0.3%) and the NSE Nifty is trading down 31 points (0.4%). The BSE Mid Cap index is trading down 1.4% while the BSE Small Cap index is trading down by 0.8%. Gold prices, per 10 grams, are trading at Rs 28,646 levels. Silver price, per kilogram is trading at Rs 37,058 levels. Crude oil is trading at Rs 2,124 per barrel. The rupee is trading at 68.32 to the US$.
Stocks in the automobile space are trading on a negative note with Escorts and Maharashtra Scooters leading the losses. As per a leading financial daily, Tata Motors is working on reducing the engine size for its diesel vehicles. The initiative comes in the wake of sales restrictions in this regard imposed for the Delhi-National Capital Region.
The company is looking to downsize its engines to below 2,000cc (two litres) for its models from its sports and utility vehicle portfolio. This is being done for the company to be able to resume sales in these areas. The company has also developed a one-litre diesel engine and a 1.2-litre petrol engine for its yet-to-be-launched Zica hatchback.
It shall be noted that earlier this year the Supreme Court banned the registration of diesel vehicle with an engine capacity of 2,000 cc or more in Delhi and National Capital Region (NCR) till 31 March 2016 owing to high pollution levels in the city.
As of now, six Tata Motors models- Aria, Movus, Safari, Safari Storme, Sumo Gold and Xenon- are affected by the ban. Further, at the recent Auto Expo the company showcased four new passenger vehicles. Of these, the Hexa, a multi-seater utility vehicle, carries a diesel engine 2.2-litre in size and, therefore, is ineligible for sale in Delhi-NCR. All the four vehicles are expected to reach the showrooms over the next 12 months.
We believe that the above plan for downsizing engines to below 2,000cc will aid the volumes of Tata Motors going forward. Further, the company's product plan includes 2 new vehicle launches slated for every year till 2020.
Presently the stock of the company is trading down by 0.9%.
As per an article in Moneycontrol, India's gold imports increased by 85.2% to US$ 2.91 billion during the month of January. Further, during the April-January period of the current fiscal, gold imports have increased to US$ 29.36 billion as against US$ 27.42 billion in the first 10 months of 2014-15. The surge was driven by a dip in global prices for the golden metal.
It should be noted that for the entire 2014-15 fiscal, gold was the third-largest commodity imported to India after crude oil and electronic items. Gold imports stood at US$ 34.32 billion last fiscal. These higher imports have impacted the country's current account deficit (CAD).
India imported 850 tonnes of gold during January-September period of 2015, as against 650 tonnes in the year-ago period. In the July-September quarter of the current fiscal, CAD rose to US$ 8.2 billion or 1.6% of the GDP. This is as against 1.2% or US$ 6.1 billion in the April-June quarter.
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