After opening in the green, the Indian indices have given up the early gains and are trading below the dotted line. Realty and metal stocks are leading the list of losers. Mid and small cap stocks too are on the decline.
Most auto stocks are trading lower today. Ashok Leyland and TVS Motors are leading the list of losers. As per a leading financial daily, Tata Motors has failed to cash in on the initial demand for its new passenger vehicle model 'Zest'. The customer waiting period for this model's automated manual transmission (AMT) variant has spiked to 6 months even as the company struggles to increase the production to meet demand. The problem seems to be due to constraints at one of the company's vendors who is the sole supplier of gear boxes for the model.
FMCG stock are trading mixed led by Dabur and Emami. As per a leading business daily, the recent fall in food prices, an uneven monsoon and lower rural wages have been taking a toll on demand in rural India. A tempering in the growth rate of minimum support prices fixed by the government also seems to be taking a toll. The sales of tractors are often seen as a rough indicator of demand sentiment in India; these have declined 12% YoY in the month of October. FMCG companies, many of which receive a significant chunk of their sales from rural India, may witness dull demand for their products if this trend is to persist.