Election results weigh heavy on mkts

Tue, 6 Mar Closing

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   01:30 pm   

Indian stock markets had a volatile session today on account of apprehension about poll results in few states. Indices opened in the red. However they moved higher mid-session. But, towards the close of today's session, the indices lost momentum and closed in the red due to profit booking in index heavyweights. High crude prices, with brent crude at US$ 123.9 a barrel also left a bad taste in investor's mouths.

While the BSE-Sensex closed lower by around 190 points (down 1.1%), the NSE-Nifty closed lower by around 58 points. The BSE Mid cap and the BSE Small cap were also at the receiving end and closed lower by 1.1% and 1.3% each. With respect to sectoral indices, only FMCG stocks and consumer durables closed in the positive while power and metal stocks racked up the losses.

As regards global markets, Asian indices closed weak today while European indices also opened deep in the red. The rupee was trading at Rs 50.31 to the dollar at the time of writing.

According to a leading business daily, Indian auto maker Tata Motors (Telco) has placed a US$ 350 m bid to buy the bankrupt Swedish car maker Saab Automobile. According to reports, the company's global acquisition team has been in negotiations with Saab and various private equity (PE) players for a prospective acquisition by its Jaguar-Land Rover unit. India's largest auto company had bought British luxury car brands Jaguar and Land Rover from Ford Motors in 2008 for US$ 2.3 bn as part of its global expansion strategy.

Saab is owned by Dutch company Swedish Automobile. It filed for bankruptcy in December post a number of failed deals to keep it alive. All of Saab's assets would be for sale, and there are a number of takers for these assets. Tata Motors may face competition from China's Youngman, which is also in the hunt for Saab. According to newspaper reports even Mahindra & Mahindra Ltd. (M&M) may have put in a bit for Saab. Late last year M&M had bought a 70% stake in the Korean SsangYong Motor Company.

Compressed natural gas (CNG)prices for vehicles in Delhi have been raised by 5%. Oil marketing firms such as Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd. (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) also plan to raise petrol rates in a few days post state elections and on account of a sharp increase in global crude prices. The quantum of increase in petrol prices could be around Rs 5 per litre. Indraprastha Gas Ltd. (IGL), the sole supplier of CNG in Delhi and the neighbouring National Capital Region (NCR) raised gas prices by Rs 1.70/kg in Delhi and Rs 1.90 per kg in neighbouring areas such as Noida, Greater Noida and Ghaziabad. Prices were hikes on account of a declining domestic supply and costly imports. This is the second similar increase in barely two months. According to IGL's estimates the running cost per km will increase by 5 paisa for autos, 9 paisa for cars and 48 paisa for buses.