Mid, small caps trade in the red

Fri, 18 Jul 01:30 pm

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   Closing   

Indian stock markets continued to remain volatile in the previous two hours of trade and are currently trading marginally above the dotted line. Selling pressure is being led by stocks from realty and power sectors, whereas software stocks are trading in the green.

The BSE-Sensex is trading up by 40 points and the NSE-Nifty is trading up 10 points. While the BSE Mid Cap index is trading down 0.4%, the BSE Small Cap index is trading down 0.1% today. The rupee is trading at 60.33 to the US dollar.

Almost all PSU banking stocks are trading in the red today. Indian Overseas Bank and Union Bank are leading the pack of losers. As per a leading business daily, the country's largest bank SBI is expected to raise about Rs 200 bn over the next 2 years to fund its capital requirement and expansion plans. This will entail issue of new securities and dilution for the existing stake holders. As such, government is also expected to support the plan as it is open to lowering its stake in the PSU banks to 51% while keeping the control with itself. The government currently holds about 58.6% stake in SBI. It may be noted that PSU banks will require additional equity of Rs 2.4 lakh crores to meet the Basel III norms of capital adequacy by 2018. The move will help the bank to take advantage of surge in its stock price out of optimism over the change in government, which is expected to put economic growth back in track. SBI is down by 1.6% today.

Majority of the automobile stocks are trading in the red led by Eicher Motor and Bajaj Auto. Hero MotoCorp and Mahindra & Mahindra are among the few stocks trading positive. As per a leading financial daily, Eicher Motors is planning to launch Royal Enfield in Columbia later this year for which the Corbeta Group has been appointed as the exclusive distributor. The company will also introduce its range of purpose-built apparel and accessories in the country. In the domestic market, Eicher Motors' 50:50 joint venture with Volvo Group of Sweden namely Volvo-Eicher Commercial vehicles has launched light and medium trucks (Eicher Pro 1000 and 3000) with higher power and durability to meet the needs of the emerging mid-premium market segment. As per the company, the new generation of trucks and buses are aimed at improving the transport efficiency in the country and reducing the logistics costs for goods. Volvo's technology and Eicher's competence in frugal engineering have been utilized to improve the fuel efficiency in the commercial vehicles launched. The six-year old joint venture company makes a range of trucks and buses, power train and components and also offers design services. Eicher Motors stock is presently trading down by 1%.