Most major Asian stock markets have opened the day on a weak note with stock markets in China (down 1.5%), Japan (down 1.2%) and Hong Kong (down 1%) leading the losses. The Indian stock markets have also opened the day on a weak note. Stocks in the consumer durables, realty and metal space are the major losers. However, healthcare stocks are trading firm.
The BSE-Sensex is down by around 108 points (0.6%), while the NSE-Nifty is down by around 37 points (0.7%). Mid cap and small cap stocks are trading in the negative zone as well, with the BSE Mid cap and the BSE Small cap indices down by about 0.3% and 0.2% respectively. The rupee is trading at Rs 50.92 to the US dollar.
PSU Bank stocks have opened the day on a weak note with Oriental Bank, Vijaya Bank, Central Bank and UCO Bank leading the losses. India's largest public sector bank State Bank Of India (SBI) has raised the interest rates on term deposits by 1%. The bank will offer an interest rate of 8% on deposits across various maturities less than one year. The new rate is set to be effective from today for deposits below Rs 10 million. The interest rate hike has come in a bid to prevent existing customers to switch to other banks that offer higher rates on savings account. It is likely that other banks will also follow suit. It must be noted that interest rates on savings bank accounts were freed in the latter half of 2011.
Auto stocks have opened the day on a weak note with Maruti Suzuki, Hero MotoCorp and Tata Motors (Telco) facing selling pressure. As per Maruti Suzuki's Chairman Mr R C Bhargava, the company is planning to reduce car production at its Gurgaon plant. However, there are no immediate plans to totally shift vehicle production out of this plant. At Gurgaon, Maruti is gearing to shut down one of the three assembly lines by 2015. This will reduce the installed capacity in the mother plant by 30%, from 7.2 lakh cars to 5 lakh cars. The decision to shut down one assembly line came on the back of complaints by Gurgaon residents who were being hassled by the movement of the trailers carrying cars from the factory as also the large quantities of incoming material. In place of the assembly line, the company would install its new diesel engine plant with a capacity of 3 lakh engines and will also make components.