The major Asian stock markets have opened the session on a negative note with markets in Hong Kong (down 2.41%) and China (down 2.44%). US and European stock markets closed their session on a negative note weighed down by weak earnings. The rupee is trading at 64.05 per US dollar.
Indian stock markets have also started the week on a pessimistic note owing to negative sentiments across global peers. BSE-Sensex is trading down by 223 points (down 0.79%) and NSE-Nifty is trading down by 71 points (down 0.83%). S&P BSE Midcap is trading down by 0.75% while S&P BSE Smallcap index is trading down by 0.32%. Major sectoral indices are trading on a negative with stocks in Banking sector witnessing maximum selling pressure.
Stocks in the pharmaceutical space are trading on a negative note. As per financial daily Sun Pharmaceutical may tap the global market to raise as much as $1 bn by selling off shore bonds. The company recently issued a profit warning owing to increasing cost related to Ranbaxy acquisition and resolving manufacturing problems at its plants. The proceeds are to be utilized for the purpose of capital expenditure and refinancing. The issue may be launched in some weeks and may extend to September because August is a vacation period for US investors. Stock of Sun Pharma is down by 0.09%.
Power stocks have also opened the day on a weak note. According to article in the economic times, the thermal power capacity utilization has reached a new low of 59% in June. The Plant Load Factor (PLF) in the year ago period stood at 66%. The experts have stated that it would make it difficult for commercial plants to service their debt at such low levels of PLF. The private sector companies who do not have any long term power purchase agreement will be the worst hit by such low PLF and would result in lower return on investment. A number of power plants have experienced cost overruns of 35-38% in the recent past.