Positive cues from the US markets have led the Asian markets to open in the positive today. Currently, Taiwan, Indonesia and Japan are leading the pack of gainers. However, China opened the day in the negative. As for the Indian markets, these have opened on a weak note. Stocks from realty are the main losers.
The BSE-Sensex is trading lower by around 28 points (0.1%), while the NSE-Nifty is down by about 19 points (0.3%). Mid and small cap stocks are trading in the negative as well, with the BSE-Midcap and BSE-Smallcap indices down by 0.5% and 0.4% respectively. The rupee is trading at 45.16 to the US dollar.
In the latest move, the foreign stakeholders in the new telecom operators have been served a notice by the Enforcement Directorate (ED). ED has sought details of the transactions by way of which the foreign stakeholders gained their stake in the new operators. The ED is investigating whether these companies through their various subsidiaries, carried out interlinked financial transactions to hide the real beneficiaries of the 2G spectrum scam. The ED is investigating if these companies were just the front face of investors in India and abroad, who had illegally obtained 2G licenses in 2008. However, the companies have denied receiving any such notice. Currently Bharti Airtel is trading in the green while Idea Cellular and RCOM are both trading in the red.
Auto stocks are trading mixed currently. While Hero Honda and M&M are finding favour, Maruti and Tata Motors are trading in the red. As per a leading business daily, auto major Maruti is set to raise prices for the third time this fiscal. These price hikes will take place in January 2011 and has been fuelled by higher input costs and a stronger yen. It must be noted that Maruti of late has been facing considerable pressure on its margins as the prices of key raw materials have spiked. Moreover, with competition intensifying, the company has not been able to pass on the impact of higher input costs to consumers very easily as it would erode market share. That said, prices of steel, rubber and copper have escalated by 15%, 100% and 12% respectively. The yen has also strengthened against the US dollar putting further pressure on Maruti as imports have become costlier. Little wonder then that the company has been compelled to raise prices of its models.