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Indian share markets open weak
Fri, 31 Aug 09:30 am

Asian stock markets have opened the day on a mixed note with markets in Japan (down 1.1%) and Indonesia (down 0.6%) leading the losses in the region. However, markets in Taiwan (up 0.3%) and Singapore (up 0.1%) are trading firm. The Indian share market indices have opened the day on a weak note. Stocks in power, IT and capital goods space are leading the losses. However, healthcare stocks are trading firm.

The Sensex today is down by around 70 points (0.4%), while the NSE-Nifty is down by around 30 points (0.6%). While the BSE Mid Cap index is trading flat, the BSE Small Cap index is up by around 0.1%. The rupee is trading at Rs 55.7 to the US dollar.

Auto stocks have opened the day on a weak note with Maruti Suzuki, Bajaj Auto and Mahindra & Mahindra (M&M) leading the pack of losers. As per a leading financial daily, the Punjab state government has decided to levy motor vehicle tax (MVT) at a uniform rate of 6% on all passenger vehicles including two-wheelers, instead of the different tax slab system. Under the old system, the Punjab state government levied 2% MVT on cars having value of less than Rs 5 lakh, 4% on cars having value between Rs 5 lakh and 10 lakh, 6% on vehicles having value between Rs 10 lakh and Rs 20 lakh, and 8% on vehicles with value of over Rs 20 lakh. The MVT on two-wheelers was 4%. With the new system, buyers of two-wheelers and small cars will have to bear a higher tax burden. On the other hand, buyers of high-end luxury cars will have to pay lower tax as the MVT for them will come down from 8% to 6%. It is worth noting that small and mid-sized cars and two-wheelers account for the maximum volume of vehicle registration. As such, the shift to uniform MVT will result in higher tax collection for the state government but it may hit demand for vehicles in the state the short term.

Power stocks have opened the day on a weak with National Thermal Power Corporation (NTPC), Tata Power and JSW Energy facing selling pressure. On account of uncertainty surrounding the supply of coal, India's largest power producer NTPC has cut down its investment target for the 12th five year plan by Rs 500 bn. It must be noted that the state-run power producer had set an investment target of Rs 2,000 bn during the five year period ending 2017. As such, capacity addition of about 11,000 MW will be postponed to the 13th five year plan starting 2017-18. Currently, NTPC has a power generation capacity of 36,000 megawatt (MW). It accounts for about 92% of the country's coal-based capacity.

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Oct 23, 2017 (Close)

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