Metal stocks push markets lower

Fri, 20 Aug 09:30 am

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The Indian markets have started today's session on a negative note. The benchmark indices opened below the breakeven mark and have remained firmly in the negative territory. Other key Asian markets are in the red with China (down 1.3%) leading the pack of losers. The US markets closed lower by 1.4% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading weak with software and metal majors facing the brunt of selling activity. The BSE-Sensex is trading lower by around 50 points, while the NSE-Nifty is down by about 15 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 0.1% each. The rupee is trading at 46.62 to the US dollar.

Auto stocks have opened the day on a negative note. Losers here include Ashok Leyland and Escorts. As per a leading business daily, Tata Motors plans to widen its product line under the joint venture (JV) with Italian auto giant Fiat and explore newer engine technologies. Until recently, the JV was incurring losses as its vehicle and engine making plant at Ranjangaon remained largely underutilised. After the JV was formed, Tata Motors became preoccupied with efforts like the buyout of Jaguar and Land Rover (JLR) and then making it profitable. It was also busy with the development and launch of its small car, Nano. But now, Tata Motors is keen on launching more Fiat products in India and expanding its sales outlets. It may be noted that Fiat recently launched a hatchback, Uno, in Brazil and it may be on its way into India. Also, a new small car being developed by Fiat, would be launched in India by the end of next year.

Energy stocks have opened the day on a weak note. Losers here include Chennai Petro and Gujarat Gas. As per a leading business daily, SEBI has rejected a second attempt by Reliance Industries to settle charges of insider trading out of court. The regulator is probing the sale of stock futures of Reliance Petroleum, in the first week of November 2007, a few days before parent Reliance Industries started trimming its stake in Reliance Petroleum through open market transactions. Reliance Industries had earned Rs 40 bn from this sale. The sellers of the stock futures were allegedly located at the address of some Reliance Industries group companies. SEBI will pass a final order after hearing Reliance Industries. The company had made an earlier attempt at settlement by offering to pay a penalty of Rs 200 m. That attempt was rejected by the regulator.