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Indian share markets open weak
Thu, 12 Sep 09:30 am

Barring Indonesia (down 0.6%) and Japan (down 0.2%), major Asian stock markets have opened the day on a firm note with Singapore (up 0.6%) and South Korea (up 0.4%) leading the gains. The Indian share market indices have opened the day on a negative note. Stocks in the private banking and metal space are leading the losses. However, realty stocks are trading firm.

The Sensex today is down by around 63 points (0.3%), while the NSE-Nifty is down by around 21 point (0.4%). However, mid and small cap stocks are trading in the green with the BSE Mid Cap and BSE Small Cap indices up by around 0.8% and 0.5% respectively. The rupee is currently trading at Rs 63.26 to the US dollar.

Cement stocks have opened the day on a firm note with Heidelberg Cement, UltraTech Cement and JK Lakshmi Cement leading the gains. As per a leading financial daily, Aditya Birla Group firm UltraTech Cement has agreed to acquire the cement plants of Jaiprakash Associates located in Gujarat. The Gujarat cement units are part of Jaypee Cement Corporation, a wholly-owned subsidiary of Jaiprakash Associates. The plants have a total cement capacity of 4.8 million tonnes per annum (mtpa). This will increase UltraTech's cement capacity by 9%. The enterprise value of the deal is Rs 38 bn, translating into US$ 124 per tonne. Of this, Rs 1.5 bn is equity which UltraTech pay by issuing shares to Jaiprakash Associates. The remaining Rs 36.5 bn is debt, which will be taken over by UltraTech. The deal will help the debt-trapped Jaiprakash Associates to lower its debt burden by 15%.

PSU bank stocks have opened the day on a firm note with Indian Bank, United Bank of India and Union Bank leading the gains. As per a leading financial daily, India's largest public sector lender State Bank of India (SBI) has made eligibility norms for car loans more stringent. In a bid to lower the chances of default, the bank has raised the eligibility limit for salaried individuals from Rs 2.5 lakh per annum to Rs 6 lakh per annum. In other words, salaried individuals with gross income of less than Rs 6 lakh per annum will not be eligible to avail car loans from SBI. However, for SBI account holders the eligibility limit has been pegged at Rs 4.5 lakh per annum. Currently, the interest rate on car loan is 10.45%. During the first quarter of the financial year 2013-14 (1QFY14), SBI's car loan portfolio increased by 38.7% year-on-year to Rs 264.11 bn.

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