Asian stock markets have opened yet another day on a weak note with stock markets in Hong Kong (down 1.8%), South Korea (down 1.8%) and China (down 1.3%) leading the losses. The Indian stock market have also opened the day on a weak note. Stocks in the oil and gas, metal and banking
space are leading the losses.
The BSE-Sensex is trading lower by 130 points (0.8%), while the NSE-Nifty
is down by around 44 points (0.9%). BSE Midcap and BSE Small cap stocks are also trading in the red, with the BSE Mid Cap
and BSE Small Cap
indices down by 1.4% and 1.2% respectively. The rupee is trading at 51.10 to the US dollar.
Auto stocks have opened the day on a weak note with Tata Motors, Maruti Suzuki and Ashok Leyland leading the losses. As per a financial daily, leading Indian utility vehicles manufacturer Mahindra & Mahindra (M&M) and Telephonics, a unit of US-based diversified Griffon Corp, have agreed to form a joint venture (JV) to provide surveillance and communication devices to the Indian defence sector. As per plans, the JV would provide radar and surveillance systems, identification devices and communication systems to India's defence ministry and the civil sector. M&M and Telephonics are also planning to set up a plant in India to manufacture and service airborne radar systems that are supplied to state-run military aircraft maker Hindustan Aeronautics Ltd and to support airborne maritime surveillance systems for the Indian Navy and Coast Guard. For the planned foreign direct investments (FDI) in the venture, the two firms have the approval of India's Foreign Investment Promotion Board. However, the size of the proposed FDI has not been disclosed. India plans to spend about Rs 2.5 trillion over the next five years to upgrade its military to counter the rising dominance of China and threats from Pakistan.
Realty stocks have opened the day on a weak note with Parasvanath Developers, IL&FS Engineering and Hindustan Construction Company (HCC) leading the losses. HCC has announced that it plans to discontinue three of its business verticals in order to make the company leaner. It has decided to discontinue its thermal power division, ports and hydrocarbons businesses just a year after these businesses were started. The main reason cited for this is the economic slowdown due to which the businesses were unable to expand in the direction as was earlier expected by the company. The order book for these was miniscule as compared to HCC's total order book. HCC will complete the pending orders in the thermal power and ports divisions, but will not look for any further new businesses for these verticals. HCC will now focus on the five core verticals of hydropower, water, nuclear power, transportation and EPC (engineering, procurement & construction). The company had announced dismal second quarter results for the financial year 2011-2012 (2QFY12) with a loss of Rs 405 m.