The Indian stock markets dropped further into the red during the post noon trading session. Barring stocks from the IT space, stocks from across the board are trading weak with realty, power and metal stocks being the least favoured at the moment.
The Sensex today is trading lower by about 150 points (0.9%), while the NSE-Nifty is trading lower by about 50 points (0.9%). The BSE Mid Cap and BSE Small Cap indices are trading lower by about 0.1% each. The rupee is trading at 56 to the US dollar.
Auto stocks are currently trading mixed with Bajaj Auto and Hero Motocorp trading weak, while TVS Motors, M&M and Tata Motors are leading the pack of gainers. The stock of TVS Motor is leading the gains on the back of reports of the company being in talks with German auto major BMW AG's motorcycle division for a possible technological alliance. This move would be a strong advantage for TVS Motor as it would allow the company to improve its offerings on the technology front and compete with rivals in the higher powered two-wheeler segments. This news comes in at a time when TVS has been struggling to hold its ground in scooter and motorcycle segment given that Honda overtook it to become the third largest two-wheeler player in India. While TVS is largely present in the entry level two wheeler segment, it has been losing market share in the same. Also, higher powered bikes have been gaining momentum in terms of volumes in recent times, and thereby growing at a faster pace. Also, this move would be beneficial for TVS given that it could earn higher margins as well.
As per a leading financial daily, Steel Authority of India (SAIL) has said that barring the Burnpur project, its capacity expansion programme is largely on schedule. The company, in 2009, had outlined a Rs 720 bn capital expenditure plan to expand capacity by 9.6 million tonne per annum (mtpa) to 23.4 mtpa by 2013. The expansion is being carried out at its five integrated facilities and three alloy steel making facilities. Till now, SAIL has placed orders for equipment worth Rs 590 bn and spent nearly Rs 385 bn in expansion. As per the company, the Burnpur project has been delayed by more than one year on account of molten debris being found at the plant site. This has led to cost overrun of Rs 20 bn in scaling up the plant capacity at Burnpur by three mtpa.