As the crisis in the Euro zone deepens, the Asian stock markets have opened the day on a negative note. Markets in Korea (down 2.7%), Japan (down 2.6%) and Hong Kong (down 2.3%) are leading the losses in the region. The Indian stock markets have opened the day on a negative note as well. Stocks in the auto and consumer durables are witnessing maximum losses.
The BSE-Sensex is down by around 194 points (1.2%), while the NSE-Nifty is down by around 62 points (1.3%). Mid and small cap stocks are trading in the red as well with the BSE Mid cap and BSE Small cap indices down by around 1.1% and 0.8% respectively. The rupee is trading at Rs 54.73 to the US dollar.
Engineering stocks have opened the day on a mixed note with Punj Lloyd and Voltas Ltd trading in the red while KSB Pumps and Elgi Equipments are trading in the green. As per a leading daily, engineering major Larsen & Toubro (L&T) has announced plans to merge its property development and real estate units. This plan is in line with the company's business realignment strategy. The combined unit would manage the entire real estate business of the company. Currently L&T owns a 75% stake in L&T Urban Infrastructure which is into building residential and commercial infrastructure. L&T Realty on the other hand is a wholly owned subsidiary of the company. L&T Realty will take over the projects that are currently being executed by L&T Urban Infrastructure. Also as a part of the consolidation process, L&T Urban Infrastructure has bought back about 10% if its stake from HDFC Property Fund.
Telecom stocks have opened the day in the red with Tata Communications, Bharti Airtel and Reliance Communications leading the pack of losers. The country's largest telecom operator, Bharti Airtel, seems to have started a new round of pricing war in the telecom markets. The company has slashed the prices on its premium 3G data plans by nearly 70%. Its peers including Vodafone and Idea Cellular are expected to follow suit. Considering the high price elasticity in the Indian markets, this move is expected to boost the volumes on the data side. The price cut comes in despite the fact that the sector is haunted by regulatory uncertainty. The Telecom Regulatory Authority of India has proposed sky high auction prices for the 2G spectrum. If the auction goes through at TRAI's proposed prices, then all operators would be forced to increase tariffs to compensate for the increased costs.