Owing to the debt concerns over Spain, most of the Asian equity markets have opened the day on a weak note. Markets in Japan (down 1.1%), Korea (down 0.9%) and Taiwan (down 0.8%) are witnessing maximum losses in the region. The Indian equity markets have opened the day on a negative note as well. Stocks in the metal and IT sectors are witnessing maximum losses.
The Sensex today is down by around 31 points (0.2%), while the NSE-Nifty India is down by around 14 points (0.3%). Small cap stocks are trading in the red as well with the BSE Small cap index down by 0.04%. However, mid cap stocks are witnessing buying interest with the BSE Small cap index up by around 0.1%. The rupee is trading at Rs 55.74 to the US dollar.
Oil and gas have opened the day on a mixed note. On one hand Indian Oil Corporation and Hindustan Petroleum Corporation Ltd. (HPCL) are trading in the green. On the other hand, Cairn India and Petronet LNG are trading weak. Bharat Petroleum Corporation Ltd (BPCL) and Videocon Industries may see up to 100 trillion cubic feet of in-place gas reserves in their Mozambique block. The two companies have a 10% stake each through their subsidiaries in the block. The majority share holder in it is US based Anadarko which holds a 36.5% stake in the block. The consortium plans to set up an LNG (liquefied natural gas) plant to ship the gas from the block to other destinations. This is due to the fact that the local demand for the gas is weak. The consortium would also be investing in extending the port facilities in the region to facilitate the transport of gas.
Auto stocks have opened the day on a weak note with Force Motors, Eicher Motors and Ashok Leyland leading the pack of losers. The demand for cars has finally started to show signs of slowing down. The car sales in May this year grew by a mere 3% YoY. This is the slowest growth in the segment since it hit a high in October last year. Higher interest rates and fuel costs have been playing spoilsport for a while. To add to this worsening consumer sentiment as well as the economic uncertainty too have taken a toll on the demand for cars in the country. The auto companies are also on tenterhooks due to the proposed tax on diesel cars. If the government goes ahead with it, it would further impact the demand in the country. Though car makers have been lobbying against it, there has been no decision on the subject by the government as of now.