As regards global markets, Asian indices ended on a weak note. European indices opened on a firm note. The rupee was trading at Rs 62.8 to the dollar at the time of writing.
Stocks of automobile manufacturers ended the day on a firm note with Ashok Leyland and Eicher Motors leading the gains. As per a leading business daily, workers at Hero Motocorp's Gurgaon and Haridwar plants are planning to go on strike again. The issue this time around is over reinstating the 38 suspended workers during the previous strike. What is more, the workers are threatening to do so during the upcoming festive season, the busiest time of the year for auto manufacturers usually. The Haridwar plant has a capacity to produce 8,500 vehicles a day, while the company's Gurgaon facility can produce up to 6,500 units per day. In addition to this, the company also has another plant in Dharuhera with similar capacity as that in Gurgaon. The company would look at settling this issue at the earliest as the upcoming festive season is expected to see strong action given that the year till date has been dull for the auto sector on the whole.
Steel stocks ended the day on a weak note with Jindal Steel and Steel Authority of India (SAIL) leading the pack of losers. As per the management of Tata Steel, India's steel consumption is expected to grow by 5% YoY in the current year. The slow growth would be largely due to lesser demand from the construction/ real estate as well from the automobile sector. During FY11, FY12 and FY13, the growth rates stood at 9.9%, 5.5% and 3.3% respectively. However, in the 5mFY14 period, steel consumption has been flat at 30.34 m tonnes. As per the management, construction activity consumes nearly 60% of the volumes, which is why its revival would have a strong impact on the overall consumption levels. Given the prolonged monsoon season, construction activity would have been poor. Not to mention the fact that Indian auto manufacturers are also grappling with the slowdown. As for steel prices, the same are expected to remain stable given that the input costs have stabilized too. What will also be a key factor to gauge over the short term is the utilisation of the additional capacities that are coming up (calculated at 16% of the current domestic capacity) in FY14. As such, there is a possibility of overcapacity situation happening which is why Indian steel manufacturers will have to focus on exports in the short run.