Continuing from where they left off yesterday, the indices began the day’s proceedings on a weak note today. Stocks from the benchmark indices found few takers even a day after the interim budget left investors disappointed. The Sensex closed lower by around 270 points, while the Nifty closed lower by around 70 points.
Stocks from the mid-cap and small-cap indices ended the day in the red. While selling activity was witnessed across sectors, stocks from the realty and banking sectors led the pack of losers. The rupee closed at 49.6 against the US dollar. Other Asian markets also ended on a weak note today while the European indices are currently in the red.
In addition to Central Bank of India, Vijaya Bank and UCO Bank, the government is now planning to infuse additional capital into Union Bank of India to help the bank enhance its capital adequacy ratio (CAR) above 12%. As per a leading business daily, the bank is likely to receive nearly Rs 15 bn of fresh capital in the next couple of years. The bank had CAR of 12.3% at the end of December 2008. The government will subscribe to the bank's perpetual non-convertible preference shares.
Auto stocks ended the day on a weak note led by M&M and Tata Motors. As per a leading business daily, auto major, M&M is planning to venture into manufacturing of high end boats and yachts. It is believed that the company has tied up with an international company to form a joint venture to manufacture such boats.
While details of the investments have not been mentioned, the company is planning to target customers who import yachts for private collection. Considering that boats and yachts are ultimate luxury items, the rationale behind entering this segment in current times remains unclear. However, being a niche segment, the company would benefit from lesser competition.
As per a leading business daily, the government is looking to set up a committee called the GoM (Group of Ministers), which will help in sorting out the 3G issues. These include issues such as the number of slots and reserve price for the 3G services. The GoM is likely to be constituted this week. According to the telecom minister, the government is looking to sort out the spectrum options possibly before the end of this fiscal.
Source : Equitymaster.com