Metal stocks push markets lower

Wed, 7 Jul 09:30 am

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The Indian markets have started today's session on a negative note. The benchmark indices opened at the breakeven mark, but soon slipped in to the negative territory. They have not managed to pare their losses since then. Other key Asian markets are in the red with Hong Kong (down 1.1%) leading the pack of gainers. The US markets closed higher by 0.6% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading weak with metal and banking majors facing the brunt of selling activity. The BSE-Sensex is trading lower by around 60 points, while the NSE-Nifty is down by about 20 points. However, 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 0.2% respectively. The rupee is trading at 46.97 to the US dollar.

Auto stocks have opened the day on a negative note. Losers here include Escorts and Tata Motors. As per a leading business daily, Tata Motors plans to invest about Rs 100 bn in the next 2 to 3 years on product development, modernisation of its facilities and other capital expenditure. The company plans to expand its product range and increase its presence in the domestic and global markets in both commercial and passenger vehicle segments. Towards this, the production of its mini truck Ace at its Pantnagar facility will be ramped up to 20,000 units a month from 15,000 units at present within the next two months. It will also start rolling out light and medium commercial vehicles from its new plant in South Africa by the end of FY11. Then there are plans by Jaguar Land Rover to invest in eco-friendly technology, new models and variants. As such, it is seeking shareholders' approval through a postal ballot to raise long-term funds. The company plans to raise about Rs 47 bn through the issue of securities in domestic and international markets.

Energy stocks have opened the day on a negative note. Losers here include BPCL and Indraprastha Gas. As per a leading business daily, Reliance Industries has told the government that it cannot sign contracts to supply gas from its KG D6 fields beyond 60 m standard cubic meters per day (mmscmd) as it may not be able to sustain higher production. The government has already allocated about 64 mscmd of output. The company has so far committed to the supply of 57.8 mscmd of gas. It has told the government that it can only sign contracts on a firm basis for another 2.2 mscmd. Although the company is aiming at a peak output of 80 mscmd, it can achieve it only by the end of this year or early next year.