Indian share markets open weak

Fri, 10 Aug 09:30 am

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All major Asian stock markets have opened the day on a weak note with stock markets in Japan (down 0.9%) and Hong Kong (down 0.7%) leading the losses in the region. The Indian share market indices have also opened the day on a weak note. Stocks in auto and capital goods space are leading the losses. However, technology stocks are trading firm.

The Sensex today is down by around 31 points (0.2%), while the NSE-Nifty is down by around 6 points (0.1%). While the BSE Mid Cap index is trading flat, the BSE Small Cap index is up by around 0.1. The rupee is trading at Rs 55.44 to the US dollar.

Information Technology stocks have opened the day on a mixed with Infosys, Mphasis and Wipro facing selling pressure. However, Tata Consultancy Services (TCS) and Tech Mahindra are trading firmly in the green. As per a news report in Business Standard, the trial for the alleged visa fraud case filed against IT major Infosys by one of its US employees is due in some days. However, the IT firm is likely to face yet another legal battle, this time from one of its former employees. The latter has filed a lawsuit against the company alleging harassment after he reported visa and tax fraud incidents by the company's managers. As per the lawsuit filed in the Federal Court in California on August 2, 2012, the employee, a US citizen, has alleged that Infosys routinely brought foreign workers to the US on short-term business visas and billed its clients, thus evading taxes. He further claims that after reporting these issues, he was subjected to harassment by his seniors and subsequently forced to quit. Infosys, on its end, has started a detailed investigation on his allegations. It must be noted that the said employee has worked as an accounts manager with Infosys for five years.

Auto stocks have opened the day on a weak note with Tata Motors, Hero MotoCorp, Bajaj Auto and Mahindra & Mahindra (M&M) leading the pack of losers. As per a leading financial daily, domestic passenger car sales fell to their lowest level in nine months in July 2012. The total passenger car sales during the month stood at 143,496 units, 6.7% higher than the corresponding month of the previous financial year. It must be noted that the year-on-year growth is account of the low base last year as Maruti Suzuki's production was affected at its Manesar plant due to labour unrest. In July this year, about half of India's 18 leading automobile manufacturers have reported drop in sales volumes. The main reason for the dip in volumes can be attributed to high interest rates and petrol prices.