The Indian indices have been directionless since the start of the session today, with investors remaining cautious about the RBI's monetary policy announcement today. Heavyweights from the IT and technology space are current trading firm. However, auto and consumer durable stocks are trading weak. Other key Asian markets have opened on a mixed note. Japan and Hong Kong are trading lower by 0.1% and 0.3% respectively.
Both the BSE-Sensex and the NSE-Nifty are trading flat. Mid and small cap stocks are trading mixed, with the BSE-Midcap down by 0.1% and BSE-Smallcap indices up 0.1%. The rupee is trading at 46.01 to the US dollar.
Banking stocks are trading mixed with IDBI Bank and Bank of Baroda trading firm while ING Vysya Bank and Indian Overseas Bank are trading in the red. Bank of Baroda has sold 51% of its equity stake in its credit card company, Bobcards, to a Spanish bank BBVA for euro 34 mn (Rs 20.5 bn). BBVA is Spain's second-largest bank with more than euro 557 bn in total assets and a presence in over 30 countries. Through this joint venture, Bobcards aims to become a leading credit card player in the Indian market and plans to issue more than 5 m cards in the next eight years. The joint venture will leverage upon the 36 m customer base of Bank of Baroda spread over more than 3,200 domestic branches. It may be note that credit card spending in India is projected to grow at 20% per annum.
Auto stocks are currently trading weak with M&M, Hero Honda and Tata Motors leading the losses. In a bid to push-up sales of its small car Nano, Tata Motors has announced a special finance scheme by which a customer will get the car loan sanctioned within 48 hours. Tata Motors Finance (TMF) will provide finance up to 90% for the Nano at easy rates. TMF, which provides customer finance for all Tata Motors vehicles, is present in all the 540 passenger vehicles outlets of the company.
The move may help boost Tata Nano's fading popularity, as sporadic incidents of the small car catching fire has made it difficult for the company to push Nano sales. Despite a number of assurances by the company through various campaign initiatives, the number of units sold has declined from 9,000 units sold in July 2010 to the low of 509 units sold in November 2010. Besides, all new Nano customers will have an option to avail a comprehensive maintenance contract at Rs 99 per month. Tata Motors earlier this month had asked Nano buyers to bring back their cars to add safety devices free of cost to prevent the vehicles from catching fire but insisted it was not a recall.