Barring China (up 0.1%), all major Asian stock markets have opened the day on a weak note with Indonesia (down 4.7%), Hong Kong (down 1.5%), Malaysia (down 1.4%) and Japan (down 1%) witnessing heavy losses. The Indian equity markets indices have opened the day on a negative note. Stocks in the banking, FMCG, healthcare and auto space are leading the losses.
The Sensex today is down by around 245 points (1.3%), while the NSE-Nifty is down by around 86 points (1.6%). Mid and small cap stocks are also trading in the red with the BSE Mid Cap and BSE Small Cap indices down by around 1.2% and 0.6% respectively. After opening today at an all-time low of Rs 63.78 to the US dollar, the rupee is currently trading at Rs 63.13 to the US dollar.
Private sector bank stocks have opened the day on a weak note with Yes Bank, IndusInd Bank, J&K Bank and Axis leading the pack of losers. As per a leading financial daily, India's third largest private sector lender Axis Bank has increased its benchmark lending rate by 0.25% (25 basis points). As such, the bank's base rate (or minimum lending rate) stands revised to 10.25% effective from August 19, 2013. As a result of the rate hike, all categories of loans (other than exceptions permitted by RBI) will become dearer by at least 0.25%. Home, auto, corporate and all other loans that are linked with the base rate will get costlier. In early August, the country's second largest private sector lender HDFC Bank had increased the base rate by 0.2% (20 basis points) to 9.8%. It must be noted that the cost of funds have increased for banks following Reserve Bank of India's (RBI) series of steps to curb the fall of the India rupee against the US dollar.
Mining stocks have opened the day on a weak note with Ashapura Minechem, MMTC Ltd and MOIL Ltd leading the losses. As per a leading financial daily, five labour unions of the state-run coal mining giant Coal India Ltd (CIL) have called a three-day strike from September 23, 2013. However, if the government did not take steps to settle their demands by September 22, the three-day strike would be followed by an indefinite strike. The unions are protesting the government's decision to divest 5% of its equity stake in CIL. In addition, they are also protesting the government's apathy to consider a set of 25 demands. The three-day strike is expected to cause a production loss of at least 3 million tonnes and revenue loss of about Rs 4 bn. However, the situation may be worse in case of an indefinite strike which may lead to shortage of coal across the country. This, in turn, would lead to lower power generation and huge power cuts. It must be noted that the five labour unions of CIL represent almost the entire work force of the company.