Markets open on a negative note

Mon, 19 Jul 09:30 am

   Previous Close   

   Pre-Open   

   11:30 am   

   01:30 pm   

   Closing   

The Indian markets have started today's session on a negative note. The benchmark indices opened below the breakeven mark, and have remained in the negative territory. They have managed to pare their losses since then. Other key Asian markets are in the red with Hong Kong (down 0.8%) leading the pack of losers. The US markets closed lower by 2.5% last Friday.

Currently in India, heavyweights from the BSE-Sensex are trading weak with construction and software majors facing the brunt of selling activity. The BSE-Sensex is trading lower by around 37 points, while the NSE-Nifty is down by about 12 points. However, buying interest is being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.2% and 0.4% respectively. The rupee is trading at 47 to the US dollar.

Energy stocks have opened the day on a negative note. Losers here include Cairn India and Indraprastha Gas. As per a leading business daily, the petroleum and natural gas regulatory board (PNGRB) is likely to move the Supreme Court over the government decision to authorize Indraprastha Gas for city gas distribution in Ghaziabad. The issue revolves around the Section 16 of the PNGRB Act. This section, which empowers the PNGRB to authorise city gas players, had not been notified by the government until recently. Indraprastha Gas claims a pre-authorisation for Ghaziabad was disallowed by the PNGRB. The Delhi High Court had struck down this decision of the PNGRB, as Section 16 was not active. The petroleum ministry had then given the go-ahead to Indraprastha Gas. In our view, much of the turf war was avoidable. Given the importance of the energy sector in general and the natural gas segment in particular, the roles of the ministry and the regulator must be clearly defined at the very outset. So much confusion eventually hurts progress on the ground.

Auto stocks have opened the day on a negative note. Losers here include Tata Motors and Hero Honda. As per a leading business daily, Tata Motors is set to join Maruti Suzuki in the million-unit club this year. The company is looking to increase Nano's production up to 25,000 units a month by the first quarter of calendar 2011. This will push the company's output - including passenger car and commercial vehicles - beyond the 1 m mark. At that level, the company will be well positioned to reap the benefits of economies of scale. It also marks the coming of age for India's automobile sector, whose volumes have historically trailed those of its global peers. It may be noted that the company sold 450,000 passenger vehicles last year including Jaguar and Land Rover. Together with commercial vehicles, the tally was about 850,000.