Indian stock market indices traded weak over the last two hours of trade on the back of heavy selling activity witnessed across industry heavyweights. banking and metal stocks witnessed maximum selling pressure.
The BSE-Sensex is down by 173 points, while the NSE-Nifty is down by 49 points. BSE Mid cap index and the BSE Small cap index are down by 0.49% and 0.13% respectively. The rupee is trading at 49.74 to the US dollar.
Automobile stocks are trading weak led by Hero MotoCorp and Bajaj Auto. According to a leading financial daily, Mahindra & Mahindra Ltd. (M&M) is planning to launch 5 new models in the coming months. The first will be a mini-van and will be launched in the first quarter of FY13. The new mini-van is to be launched as a personal passenger car rather than a commercial van. The new Rexton SUV from SsangYong of Korea (M&M's subsidiary) will be the next model to be launched. This will be followed by an electric car, the new Reva NXR. The last two models will be a mini sports utility vehicle (SUV) and an under four meter version of the Verito sedan. These should help drive volumes in a scenario where competition in the passenger vehicles space has intensified.
Banking stocks are trading in the red led by Canara Bank and Union Bank of India. According to a leading financial daily, ICICI Bank, Bank of baroda BOB and Citi Financial (the NBFC arm of Citigroup) are joining hands to form a non-banking finance company (NBFC) to support infrastructure development in the country. While ICICI Bank and BoB will pick up 30% stake each, Citi Financial will have close to 30%. The balance will be shared by other financial entities. ICICI Bank, the sponsor bank in the joint venture, has received Reserve Bank of India (RBI) approval to commence operations. However, the government's proposal to launch an infrastructure debt fund received lukewarm response from state run banks, on the ground that the model was not cost-effective.