Barring China (up 0.3%), Japan (up 0.2%) and Indonesia (up 0.2%), all major Asian stock markets have opened the day on a weak note with stock markets in Taiwan (down 0.5%) and Singapore (down 0.6%) leading the losses. The Indian share markets have opened the day on a positive note. Barring FMCG and realty indices, all sectoral indices have opened on a firm note with IT and metal indices leading the gains.
Auto stocks have mainly opened the day in the green with TVS Motor Company, Escorts and Eicher Motor leading the gains. As per a leading financial daily, India's leading passenger vehicle maker Maruti Suzuki will pay royalty on its future car models to Japanese parent firm Suzuki Motor Corp in Indian rupees instead of Japanese yen. The move is aimed at insulating the company from forex fluctuations. In addition, the company has been augmenting its research and development capabilities and playing a greater role in joint product development with Suzuki. As a result, the royalty payout is also set to reduce. Maruti paid a royalty of Rs 6.89 bn (6.2% of net sales) in the first quarter ended June 30, 2014. The company expects the royalty paid to Suzuki to decrease starting with its upcoming compact SUV as its engineers enhance their role in the joint development of future products. It is worth noting that Maruti is investing Rs 20 bn on a research and development facility, including a test track at Rohtak in Haryana. The company is set to enter the SUV segment early next year.
IT sector stocks have opened the day on a firm note with Moser Baer India, Info Edge and Tech Mahindra leading the gains. As per a leading financial daily, India's second largest IT services exporter Infosys has inked a five-year contract with BP (earlier known as British Petroleum) to improve the oil major's IT processes across key operations. The Bangalore-based IT company will provide both IT and business consulting services to BP. It is a framework agreement that covers exploration, production, refining, marketing and business functions (including HR). The financial details of the deal have not been disclosed. It must be noted that this is a new agreement with BP and replaces all other agreements Infosys has with BP.