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Metal stocks push markets lower
Wed, 8 Sep 09:30 am

The Indian markets have started today's session on a negative note. The benchmark indices opened below the breakeven mark and have stayed in the negative territory. Other key Asian markets are in the red with Japan (down 2%) leading the pack of losers. The US markets ended lower by 1% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading weak with metal and software majors attracting investors' interest. The BSE-Sensex is trading lower by around 80 points, while the NSE-Nifty is down by about 25 points. However, buying interest is being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.1% and 0.2% respectively. The rupee is trading at 46.79 to the US dollar.

Auto stocks have opened the day on a strong note. Gainers here include Ashok Leyland and Maruti Suzuki. As per a leading business daily, Maruti plans to invest around Rs 19 bn for setting up a third plant at its facility in Manesar. This will be Maruti's largest investment in a single plant in India. This plant is expected to boost the capacity of the automaker by more than 17% to 1.7 m units from 1.45 m units per annum, when the second plant at Manesar becomes operational. The company has two facilities at Gurgaon and Manesar. The three plants at Gurgaon can jointly churn out 850,000 vehicles. At Manesar, the first plant can produce 350,000 units a year. The company is already investing Rs 17 bn for developing the second plant at Manesar. It is scheduled to come up by the beginning of 2012 and will produce 250,000 vehicles. It may be noted that the company has been facing supply constraints in delivering some models with automobile sales reporting record growth in 1HCY10. Demand has been unexpectedly high for the multi-seater 'Eeco' and also for 'Swift'.

Steel stocks have opened the day on a negative note. Losers here include Tata Steel and SAIL. As per a leading business daily, Tata Steel has called for an ultra mega steel plant policy, on the lines of the policy to promote the power sector. The steel plants to be covered under the policy should have a capacity of at least 6 to 7 m tonnes a year, it believes. It may be noted that the government offers ultra mega power plants (UMPP) for bidding. And the company that bid the lowest bags the project. The projects are allotted with various clearances, including those relating to land and environment. Coal blocks for pithead-based UMPPs are also allocated with the projects. Such approvals would help decrease the gestation time of steel projects in India, which tend to get stalled for years otherwise. Interestingly, Tata Steel also wished for diplomatic support in countering China's progress in acquiring assets globally.

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Feb 23, 2018 09:53 AM