Asian stocks have opened the week on a weak note. Markets in Singapore (down 0.6%), Hong Kong (down 0.5%) and Japan (down 0.4%) are the biggest losers. However, markets in China (up 0.1%) are seeing buyers' interest. The Indian markets have opened the day on a negative note. Stocks from the auto and realty space are leading the losers' pack.
The BSE-Sensex is trading lower by around 50 points (0.3%), while the NSE-Nifty is down by around 6 points (0.1%). Mid and small cap stocks are trading in the negative as well with the BSE Midcap and BSE Small cap indices down by about 0.58% and 0.04% respectively. The rupee is trading at 45.16 to the US dollar.
Auto stocks have opened the day on a weak note. Leading utility vehicle maker, Mahindra & Mahindra (M&M) has received the approval from its creditors for the takeover of Ssangyong Motors. The company is now focused on integrating the Korean vehicle maker and launching its products in India. In lines with this, the company has announced the top management personnel who would be heading the Korean operations. Interestingly, the top personnel are all from India. The company has chosen Mr. Sundaram to head the finance at South Korea. Mr. Sundaram was earlier the CFO of M&M. However, as stated by the management, the CEO would be a Korean. The formal announcements for this are still pending. The senior officials from India would be relocating to South Korea to take up their new responsibilities.
M&M plans to boost its research and development facilities to create a strong pipeline of products. It plans to launch two high end sedan models of Ssangyong within the year. And launch two of its SUVs next year.
L&T and other equipment makers, who rival BHEL in India's power equipment market, fear that they would lose out heavily to Chinese rivals. This is because private power firms are willing to place orders only with tough conditions that add costs to their supplies. Private power firms such as Tata Power, Reliance Power, Patel Engineering, Visa Power and Moser Baer Projects are asking equipment suppliers to give an undertaking that their foreign technology suppliers will ensure proper functioning of the equipment after delivery. Technology providers, mostly in Europe, US and Japan, would give such assurances only if they get royalty payment. Also, the power equipment market in India is at a nascent stage. On the other hand, the energy-efficient, supercritical technology is a forte of players in China, Korea and Russia. This would make domestic players uncompetitive against these foreign equipment suppliers.