Barring China (up 0.3%), most major Asian stock markets have opened the day on a weak note with the markets in Japan (down 1.4%) and Indonesia (down 0.8%) leading the losses. The Indian share markets have opened the day on a negative note. The sectoral indices are trading mixed with IT, healthcare and metal indices leading the losses. However, FMCG and capital goods indices are trading in the green.
Auto stocks have opened the day mainly on firm note with Ashok Leyland and Mahindra & Mahindra (M&M) leading the gains. As per a leading financial daily, Mahindra & Mahindra's subsidiary firm Mahindra Two Wheelers has entered into a binding bid to acquire 51% stake in Peugeot Motorcycles, an affiliate of the Euro 54 billion PSA group, for Rs 2.16 billion (Euro 28 million). Out of the 28 million Euros, 13 million Euros will be spent on secondary sale of shares from Peugeot of PSA. The remaining 15 million euro will be spent through a fresh issue of shares to M&M. The legal processes are expected to be completed in three months. After the formalities are done, the new board will have 3 nominees from Mahindra Two Wheelers and 2 from PSA Group. This acquisition will help Mahindra & Mahindra to grow its two-wheeler business.
Mining stocks have opened the day mainly on a firm note with MMTC Ltd and Gujarat NRE Coke leading the gains. It must be recalled that last month the Supreme Court had ordered cancellation of 214 of the 218 coal block allotments. This is likely to result in increased demand for coal from Coal India from power producers who are set to lose the coal blocks. As a result, the prices of coal sold through e-auctions could witness a rise. But given the government's recent move to reduce the sale of coal through e-auctions to 26 million tonnes (55% lower than FY14), the gains for Coal India are expected to be limited.