Indian equity markets open in red

Thu, 6 Jun 09:30 am

   Previous Close   

   Pre-Open   

   11:30 am   

   01:30 pm   

   Closing   

Asian equity markets have opened the day in the red with markets in Korea (down 1.5%) and Singapore (down 1.5%) leading the losses in the region. The Indian equity markets have opened the day on a negative note as well. Stocks in the metals and realty space are leading the pack of losers.

The Sensex today is down by around 111 points (0.6%), while the NSE-Nifty India is down by around 36 points (0.6%). Mid and small cap stocks are trading below the dotted line as well with the BSE Mid Cap and BSE Small Cap indices down by around 0.4% and 0.03% respectively. The rupee is trading at Rs 56.93 to the US dollar.

Auto stocks have opened the day on a negative note with Hero Motocorp, Bajaj Auto and Maruti Suzuki leading the losses. As per a leading daily, the country's largest SUV (Sports Utility Vehicle) manufacturer Mahindra & Mahindra (M&M) plans to launch its compact hatchback by the name of Vibe. This would be M&M's second car offering. The space of hatchbacks is currently dominated by Maruti Suzuki's Swift. The car is expected to be prices in the range of Rs 563,000 to Rs 649,000. At this price, Vibe would be cheaper than the Swift by nearly Rs 40,000. The company has a capacity for around 35,000 units of both Verito and Vibe, its compact car offerings. Currently M&M is selling around 700 to 800 units in the compact car category. With the introduction of Vibe, it plans to double its volumes.

Mining stocks opened the day on a negative note with Manganese Ore India Limited (MOIL), Minerals and Metals Trading Corporation (MMTC) and Sesa Goa witnessing maximum losses. As per a leading daily, the Coal Secretary has stated that the proposed coal regulator would be providing a pricing framework for coal. However, the country's largest coal producer, Coal India would retain the right to set its prices. The regulator would only be providing the principles and methodologies for fixing the prices. The actual prices would be decided by Coal India. The regulator would also look into issues related to the quality and grade of coal supplies. The basic idea behind the setting up of the regulator is to improve supplies and cut out corruption in the sector. It is worth noting that Coal India has already raised prices by about 10% for its low grade coal. At the same time it has lowered the prices for the high grade coal by about 12%. Though the idea of having a regulator is a commendable one, however we wonder whether giving the autonomy of fixing prices to Coal India would benefit the sector as a whole.