Persistent selling activity led the Indian equity markets to fall deeper into the red during the post noon trading session. Barring stocks from the healthcare and FMCG spaces, other sectoral indices are witnessing pressure with realty, metal and Auto leading the pack of underperformers.
The Sensex today is trading lower by about 140 points (down 0.8%), while the NSE-Nifty is down by about 45 points (0.8%). Midcap and smallcap stocks are also trading weak with the BSE Mid Cap and BSE Small Cap indices down by about 0.4% each. The rupee is trading at 55.73 to the US dollar.
Auto stocks are currently trading weak with Bajaj Auto and Hero Motocorp leading the pack of losers. Maruti Suzuki held its AGM yesterday where a numbers of topics were discussed, including the recent incident at the Manesar plant. However, the key aspect of the meeting seemed to be Maruti's plans and strategies over the long term. As per the company's senior management, the way forward is diesel power cars. And for the company to maintain, if not increase, its market share of 40% in the overall passenger vehicle market, it would be looking at expanding the production of diesel variants. The company is reportedly developing an 800 cc diesel engine for its two popular vehicles - Alto and Wagon R. It is believed that close to 35% of the company's vehicles sold are diesel variants. While Maruti enjoys a strong market share in the petrol segment, the market share in the diesel segment is at a much lower 22%. It must however be noted that in the month of March this year, the company finalised a Rs 17 bn investment for doubling its diesel engine capacity to 0.6 m units by 2014.
As regards to the industrial relations issue, Maruti's management said that a good industrial relations department is what is required and that the company would be aiming at bettering the relations relations between workers and management. The company stated that six days after the reopening of the plant about 700 out of the 970 permanent workers reported for work last week.
Information technology stocks are currently trading weak with NIIT Limited and Mphasis Limited leading the losses. As per a leading financial daily, Tech Mahindra is in talks to acquire Bharti Group company Comviva Technologies, a mobile financial and value added services (VAS) solutions provider. The deal is expected to be valued at around Rs 7.5 bn. Reportedly, this is the second sale by the Bharti Group after training solution firm, Centum Learning was earlier divested to Everonn in a cash and share transaction. Comviva Technologies was formerly known as Bharti Telesoft and is 50% owned by Mr Sunil Mittal and his family through holding firms and trusts. Private equity firms Sequoia and Cisco hold 30% and 5% stake in the company, respectively, with the balance 15% owned by employees.