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Sensex Opens in Red; Tata Motors Tanks 5%
Thu, 10 Aug 09:30 am

Asian stocks markets are lower today as Japanese and Hong Kong shares fall as North Korea continued to weigh on equities. The Nikkei 225 is off 0.01%, while the Hang Seng is down 1.73%. The Shanghai Composite is trading down by 1.06%. Overnight, the US markets trimmed early losses and closed slightly lower.

Meanwhile, Indian share markets too have opened the day in the red. The BSE Sensex is trading lower by 116 points and the NSE Nifty is trading lower by 35 points. S&P BSE Mid Cap and S&P BSE Small Cap are trading down by 0.6% and 0.5% respectively. Loses are largely seen in auto stocks, capital goods stocks and power stocks. The rupee is trading at Rs 63.75 against the US$.

Eicher Motors reported a 22.14% rise in consolidated net profit at Rs 4.59 billion for the first quarter ended June 30, 2017. The company had posted a net profit of Rs 3.76 billion during the April-June quarter a year-ago.

Royal Enfield posted its best ever performance in Quarter ended June 2017. In this quarter, Royal Enfield sold 183,731 motorcycles, registering its best ever quarterly sales volume and posting a growth of 24.7% over 147,349 motorcycles sold in the same period last year.

Eicher Motors share price opened the trading day down by 1.4% on the BSE.

Meanwhile, Tata Motors share price tanked 5% in morning trade after the company reported a 41.54% jump in net profit to Rs. 31.99 billion for the June quarter of the current fiscal, benefiting from one-time gain relating to changes made to JLR pension plans.

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It had posted a consolidated net profit of Rs 22.6 billion in the April-June period of last fiscal. Income from operations during the period under review stood at Rs 598.18 billion, as against Rs 661.65 billion in the year-ago period, down 9.59%.

Tata Motors said its operating performance broadly reflected JLR's lower wholesale volumes excluding the China JV and continuation of higher competitive incentive levels and launch and growth costs seen in FY17.

However, what was appalling was JLR's paltry 4.6% growth in revenue. Adding up to the negatives were higher raw material and marketing costs, especially in the US markets.

The quarter's performance was further marred by the transition to the goods and services tax (GST), which impacted retail sales across sectors in the country. Hence, operating margin in domestic operations was less one percent, down from 6.45%.

Car Sales Hit GST Bump

Uncertainties with regard to Goods and Services Tax (GST) pulled down sales of passenger vehicles (cars, utility vehicles and vans) in June. Domestic passenger vehicle sales declined by 11.2% to 198,399 units in June from 223,454 units in the same month last year, according to data released by the Society of Indian Automobile Manufacturers (SIAM).

Moving on to news from software sector. As per a leading financial daily, the government has said that job loss through automation in India should not be a matter of concern as the 'growth momentum' of the economy will result in new job opportunities.

A World bank report titled 'Digital Dividends' speculates that automation threatens 69% jobs in India. Minister of State for Finance Arjun Ram Meghwal also said that the report 'inter alia also states that 'even if technologically feasible, large-scale net job destruction due to automation should not be a concern for most developing countries in the short term'.

Meghwal further added that even in medium to long term, the growth of Indian economy of over seven percent and steps being taken to enhance the growth momentum will result in further creation of new job opportunities and absorption of replaced labour.

He added that the government has taken various steps for generating employment like encouraging the private sector, fast tracking various projects involving substantial investment and increasing public expenditure on different schemes.

However, many tech giants may not agree with his point of view. Not only have these firms seen a drop in their headcount in the last few months, but several IT experts have also explained that automation would have quite a big impact on employment in the IT sector.

Software stocks opened the trading day on a mixed note with HCL Infosystems share price and NIIT Ltd share price leading the losses.

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Aug 18, 2017 (Close)

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