Indian indices continued to bear the brunt of profit booking in key heavyweights during early hours. Other Asian markets are also witnessing selloffs. Stocks from consumer durables and FMCG space are, however, witnessing some buying interest while stocks from the IT and metals space are in the red.
The BSE-Sensex is trading lower by around 117 points, while the NSE-Nifty is down by about 30 points. Some buying interest is being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.1% and 0.3% respectively. The rupee is trading at 46.02 to the US dollar.
Telecom stocks are trading positive with MTNL, Reliance Communications, and Tata Communications trading in the green. Bharti Airtel, now the owner of Zain's African operations, plans to invest US$ 100 m in Uganda over the next two years on technology upgrades and network expansion. The company currently has 2 m subscribers in the country. This investment is expected enable Bharti to double subscriber base in the region over the next two years.
Uganda has a competitive telecom environment with 6 operators. South Africa's MTN group dominates the market share in the country. Bharti wants to increase the deployment of wireless technologies to make sure that broadband is accessible even in remote corners of the country. Uganda has a huge youth population, making it a lucrative market for mobile voice and data communications services. According to the country's telecom industry regulator, revenues from the sector are expected to increase at a rate of 25-30% annually over the next five years.
Auto stocks are trading marginally in the red. Major losers here include Mahindra & Mahindra (M&M) and Tata Motors. As per a leading business daily, car prices are likely to go up for the fourth time during the year as auto makers plan to pass on the increase in raw material prices to consumers. Maruti, Hyundai, M&M, and Tata Motors are likely to hike prices by 3-5% in the month of July. This is mainly on account of increase in raw material prices. Steel and rubber prices have risen by 20-25% in the last couple of months. It should be noted that this will be the fourth price hike since January 2010. Rising raw material prices had led to an increase in car prices in January 2010. This was followed by an excise duty hike in the union budget resulting in further price increases. Lastly in April 2010 prices increased due to implementation of new emission norms. However, it should be noted that despite frequent increase in prices the demand for passenger vehicles has remained unaffected so far.