Indian stock markets indices shed early morning gains and traded in the negative during the previous two hours of trade. Metal and power stocks are the top losers. However, IT and FMCG stocks are trading in the green.
The BSE-Sensex is trading down by 79 points and NSE-Nifty is trading weak by 28 points. BSE Mid Cap and BSE Small Cap indices are trading down by 0.4% and 0.2% respectively. The rupee is trading at 52.39 to the US dollar.
Auto stocks are trading in the red led by Eicher Motors and Force Motors. As per a leading financial daily, Mahindra and Mahindra (M&M) is planning to set up an assembly plant in Southeast Asia. The new plant is expected to start functioning in the next couple of years. The company is considering Thailand, Malaysia and Indonesia as prospective locations. As per the management, this is very much in line with their aim of becoming a global player by expanding operations globally. M&M already has an automotive assembly plant in Brazil and Egypt. The Asian Free Trade Agreement that would call for low and falling duty regimes among member countries has resulted in opportunities for the auto company.
Energy stocks are trading weak today led by Gujarat State Petronet and Gujarat Gas. As per a leading financial daily, Gas Authority of India Ltd. (GAIL) has signed a deal with Sabine Pass Liquefaction. The deal will be to import liquefied natural gas from the US from 2017 onwards. This will ensure steady long term supplies at prices that are linked to the Henry Hub (US benchmark). The deal is for a period of 20 years but can be extended to another 10 years with mutual agreement. As per the currently benchmark rates, gas would effectively cost US$ 10-11 per unit in India. This is US$ 5-6 cheaper than the gas obtained through LNG contract with an Australian firm.