Asian stock markets have opened the day on a mixed note. Stock markets in Indonesia (up 0.5%), Japan (up 0.1%) and South Korea (up 0.3%) and Taiwan (up 1%) are trading in the green, while those in Hong Kong (down 0.3%) and Malaysia (down 0.3%) and are the maximum losers. The Indian stock markets have opened the day in the green. All sectoral indices are trading in the positive except for the automobile stocks.
Auto stocks are trading weak led by Hero Honda and Bajaj Auto. As per a leading financial daily, the automobile companies like Maruti Suzuki, Honda and Hyundai are lining up discount offers to augment sales of cars. Honda started with the limited period waiver for its hatchback Honda Jazz. The other car makers followed suit. Maruti offers rebates of more than Rs 50,000 on Alto, WagonR and Estilo. Honda Siel is also offering Rs 50,000 discount on its top-selling City sedan on top of last month's Rs 66,000 price cut. Hyundai Motor India offers up to Rs 45,000 discount on its popular i10 and Santro compact cars.
This follows a drastic fall in sales growth in the month of June, 2011. It was merely 1.6%. It may be recollected that the automobile industry had grown at an astounding rate of 30% last fiscal but higher interest rates and costlier fuel slashed sales and have dented margins this year. The companies are also trying to structure deals to bring down the total cost for the customers through direct rebates to reduce inventory.
IT stocks are trading firm led by TCS (Tata Consultancy Services) and HCL Technologies. The Software major TCS posted better than expected results for the first quarter of the year. The revenues grew by 6% QoQ helped by 7.5% growth in volumes. Other income clocked a growth of 21% QoQ over the previous quarter (ending March 2011). The IT company has been able to contain the depreciation costs which have fallen by almost 2.5% QoQ. The interest charges have been high and grew by nearly 57% QoQ. As a result of higher expenditure and interest charges, net profit declined by 7.9% QoQ. Attrition rate increased marginally to 14.8% as compared to 14.4% seen during the previous quarter (ending March 2011)