At the end of a lackluster session today the Indian indices saw a significant decline in the final hour of trade. While BSE Sensex closed lower by around 232 points (down 1.2%), Nifty was down around 69 points (1.2%). Mid and small caps both faced selling pressure as the BSE-Midcap Index and the BSE-Smallcap indices were both down over 1% today.
All major indices closed in the red today, with the exception of the FMCG index. Banking and realty stocks felt the maximum selling pressure (down almost 3%). Asian markets closed mixed today. Europe is positive currently. The rupee was placed at Rs 45.81 to the dollar at the time of writing.
Cellular Operators Association of India announced that profits of the mobile telecom industry may shrink further on account of strict subscriber verification norms and charges levied on erection of cell towers by state governments. Lack of rural infrastructure and stringent customer verification has deterred the increase in mobile penetration in certain parts of the country. As of now it takes a minimum of around Rs 600-700 to activate one customer. Previously taxes on cell towers levied by the State Governments were negligible. However in Delhi such taxes levied have gone up around ten times from Rs 50,000 to Rs 500,000 currently.
The new mobile operators are already facing the pinch and are in losses. The incumbents are operating on tight margins. This situation may lead to further margin pressures.
Indian auto major, Tata Motors is expecting a 50% increase in sales of its ACE family of light commercial vehicles (LCV) in FY11, on account of strong demand. The Ace family comprises of LCVs such as Magic, Winger and Ace, manufactured at its Panth Nagar (Uttarakhand) facility. This would translate into approx. 250,000 units, compared to 160,000 sold last year. The company also wants to launch two new LCVs called Venture and Iris by early next year.
Yes Bank and Japanese Shinsei Bank signed an MoU (Memorandum of Understanding) today to advise both Indian and Japanese companies on cross-border deals between the two countries. This will help increase investment flow between the nations. With this move, the two banks will be able to leverage their in house expertise and strong local knowledge. They will be able to advise their clients on M&A, Joint Ventures and merchant banking opportunities for respective clients.