Markets continue to slide

Mon, 2 May 01:30 pm

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The benchmark indices in the Indian stock market continued to slide in the last two hours of trade. Stocks from Banking, Consumer Durables and PSU space are trading weak, while those from Realty and Healthcare are trading firm.

The BSE-Sensex is down by 128 points while NSE-Nifty is trading 48 points below yesterday's closing. BSE Midcap and BSE-Smallcap indices are also down by 0.9% and 0.8% respectively. The rupee is trading at 44.31 to the US dollar.

Pharma stocks are trading mixed with Dr Reddy's Laboratories and Cipla leading the pack of gainers. The stocks of Fresenius Kabi Oncology and IPCA Labs are trading in the red. As per a leading financial daily, the promoters of Sun Pharmaceuticals Ltd. are planning a Rs 50 bn foray into the power sector. It involves setting up a 1,000-MW power plant. Further specifics of the project have not been disclosed. It is important to note that project is set up by promoters of Sun Pharma, and not the company itself. It would be financed with personal funds of the promoters. However, promoters hold more than 60% stake in the company. Hence they have the option of pledging shares and borrowing money.

The plan complies with the trend of investing surplus funds of the drug manufacturing company in other sectors. The stock of Sun Pharma is trading in the green.

Most of the Financial Services stocks are trading in the red with Motilal Oswal, Shriram Transport and India Infoline leading the pack of losers. However, Cholamandalam Investment and Power Finance Corporation are trading firm. As per a leading financial daily, Shriram Transport Finance Company Ltd (STFC) is targeting a turnover of Rs 600 m this fiscal from new initiatives that include Auto malls, Shriram New Look and Shriram One Stop. The company had already opened an Automall at Chennai last year. This is its second Automall. The company has spent close to Rs 30 m on the two Automalls at Chennai and Vadodara combined. Besides, it has opened 12 centers of ShriRam New Look. The company plans to have the Shriram One Stop kiosks at all the 500 branches of STFC spread across the country. It has acquired around 1,200 vehicles for the New Look initiative. The One Stop kiosk is expected to come up at each branch at a cost of Rs 40,000 each. So far, three auctions have taken place at Chennai which have sold around 300 vehicles. The company plans to have 50 Automalls across the country over the next three years. Of these, around 10 are expected to come up within this year. The company plans to sell around 15,000 vehicles through the New Look initiative, out of which 10,000 vehicles sales are expected in the first year. The company estimates around 15,000-20,000 transactions per month at the One Stop.