The Indian markets have started on a weak note as the benchmark indices opened below the breakeven mark on the back of weak global cues. However, they have marched upwards towards the dotted line since then. Asia is currently trading in the red with China (down 1.6%) leading the pack of losers. The US markets closed lower by 1% yesterday.
Currently, in India, heavyweights from the BSE-Sensex are trading in the red with metal and banking stocks leading the pack of losers. The BSE-Sensex is trading lower by 26 points, while the NSE-Nifty is down by 12 points. However, buying interest is being witnessed among mid and small-cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.2% and 0.3% respectively. The rupee is trading at 46.83 to the US dollar.
Energy stocks have opened the day on a mixed note. Gainers here include HPCL and BPCL, while Cairn India is in the red. As per a leading business daily, exploration and production major ONGC has signed an agreement with Russian conglomerate Sistema to jointly acquire and develop oil & gas blocks in Russia and the CIS. Sistema is a new entrant in the hydrocarbon space but knows its way around the local bureaucracy, being the largest public corporation in Russia. ONGC already engages with Russia's state-run Rosneft and Gazprom. It also has assets in Western Siberia after the acquisition of Imperial Energy. It may be noted that India and China are trying to secure oil and gas assets worldwide in order to address their burgeoning needs. Hence, we find India putting its diplomatic weight squarely behind state owned oil companies like ONGC and Indian Oil in their overseas forays.
Auto ancillaries have opened the day on a strong note. Gainers here include Mahindra Forgings and FAG Bearings. As per a leading business daily, auto major M&M plans to consolidate its auto components businesses into a single entity. This would consolidate firms such as Mahindra Forgings, Mahindra Composites, Mahindra Gears, Mahindra Castings and Mahindra Ugine under the Systech brand. The process is expected to take over two years. M&M is likely to hold about 60% of the new entity. In our view this is a positive development as it will cut costs for the company by reducing the number of vendors and tightening its marketing effort. It may be noted that auto component companies were among the worst hit during the liquidity crisis.