Indian stock markets open weak

Fri, 6 Sep 09:30 am

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The major Asian stock markets have opened the day on a mixed note with stock markets in China (up 0.3%) and South Korea (up 0.2%) leading the gains. However, the stock markets in Japan (down 0.9%) and Indonesia (down 0.5%) are seeing selling pressure. The Indian stock market indices have opened the day on a negative note. The sectoral indices have opened mixed with stocks in the software and healthcare leading the gains. However, stocks in the auto and banking space were leading the losses.

The Sensex today is down by around 15 points (0.1%), while the NSE-Nifty is down by around 17 points (0.3%). Midcap cap stocks have opened in the red as well with the BSE Mid Cap down by around 0.1%. However, the small cap stocks are seeing buying interest. Consequently, the BSE Small Cap index is up by around 0.2%. The rupee is trading at Rs 66.01 to the US dollar.

Auto stocks have opened the day on a mixed note with Maharashtra Scooters Ltd and Ashok Leyland Ltd leading the losses. However, Tube Investments Ltd and Escorts Ltd were leading the pack of gainers. As per a leading financial daily, Tata Motors Ltd is aiming for a major organization revamp that is likely to cut costs and bring better synergies through economies of scale. The company is planning to move towards 'One Part One Vendor' strategy. Currently, it operates on three different platforms for sourcing for passenger cars, Nano and commercial vehicles. Each of these has a separate independent sourcing group. As per the new strategy, all platforms are likely to be integrated into a single sourcing group. It implies that the company will have one supplier for one product, instead of 5 -8. It is important to note here that the company has the largest vendor base in the domestic automotive segment. Currently, it ranges over 1,200 to 1,400 across the country. However, with new strategy, the company plans to reduce the number by more than half over the next three to four years. The move is likely to result in a quicker and leaner organization with better focus on quality.

Aluminium stocks have opened the day on a mixed note with Hindalco Industries Ltd and Sterlite Industries Ltd leading the gains. However, National Aluminium Company Ltd (NALCO) has opened in the red. As per a leading financial daily, Hindalco Industries Ltd has raised around Rs 99 bn to fund its aluminum project in the state of Odhisha. The company will be setting up an aluminium smelter with a capacity of 3.59 lakh tonnes along with a 900 MW captive power plant at Lapanga in Odisha. Besides, it is planning to set up an aluminium refinery with integrated bauxite mines at Koraput in Odisha for which it expects to complete by 2014. Apart from this, the company is implementing two other Greenfield projects - Utkal Alumina at Rayagada in Odisha and Mahan Aluminium in Madhya Pradesh.