Share markets in India are presently trading on a negative note, tracking fall in global peers. Asian shares declined in line with the overnight fall in Wall Street indices which came under pressure after the release of disappointing US economic data that deepened concerns about a global slowdown.
Sectoral indices are trading on a mixed note with stocks in the metal sector and finance sector witnessing selling pressure, while realty stocks and oil and gas stocks are witnessing buying interest.
The BSE Sensex is trading down by 99 points (down 0.3%), while the NSE Nifty is trading down by 21 points (down 0.2%). The BSE Mid Cap index and the BSE Small Cap index are trading down by 0.1%.
The rupee is currently trading at Rs 71.12 against the US$.
In news from the automobile sector, shares of Tata Motors rose more than 5% intraday despite the vehicle manufacturer reporting weak September sales.
The company reported a 50% fall in its domestic sales numbers at 32,376 units against 64,598 vehicles sold during the same period in 2018.
Total commercial vehicle sales were down 45.4% at 28,079 units against 51,419 units.
Tata Motors share price is presently trading up by 5.8%.
In other news, TVS Motors share price is in focus today. Stock of the company fell over 3% in early trade today after the company reported poor sales numbers in the month of September 2019.
The company has sold 3,15,912 units in September 2019 as against 4,23,939 units in the month of September 2018.
The total two-wheeler sales were down 26% at 3,00,909 units in September 2019 versus 4,10,657 units in September 2018.
However, the company's total exports grew by 17% increasing from 61,192 units in September 2018 to 71,569 units in September 2019.
Note that multiple factors have affected the auto sector of late. The liquidity crisis faced by NBFCs, regulatory changes leading to increased costs, new emission norms...they have all taken their toll.
The industry's sales and production levels have plunged, leading to job losses. In August, all major OEMs consisting of passenger, commercial, two and three-wheeler manufacturers have reported a massive decline in domestic sales.
As per Society of Indian Automobile Manufacturers' (SIAM) August sales figures, the overall sectoral offtake in the domestic market has plunged 23.6% to 1,821,490 units, from 2,382,436 units sold during the corresponding month of the previous year.
On 20 September, the government had reduced corporate tax rates from 30% to 22% to boost consumer demand and increase spending by private companies. The effective tax to be paid by the companies, including surcharge and cess, will be 25.17%.
However, in the euphoria of the government's tax rate cuts, an important announcement went unnoticed.
The road transport and highways ministry has proposed a huge increase in re-registration of vehicles which are more than 15 years old.
The proposed hike will be implemented from July 2020. The policy change is aimed at reducing pollution by scrapping older vehicles on the road.
As per Co-head of Research, Tanushree Banerjee, this might come as a welcome relief for automakers who have seen severe fall in sales over the past 1 year.
Signs of Revival in the Auto Sector
Here's what she wrote about it in a recent edition of The 5 Minute WrapUp...
- The upcoming festive season and the recent policy measures might just be the trigger needed to revive the sector.
A leading auto player makes it to my list of 7 stocks to buy.
I believe, rising disposable incomes and aspirations of India's youth, will be the key trends benefiting this market leader in the long run.
As per Tanushree, these are just some of the trends that will play a big part in the Sensex 1,00,000 journey.
Moving on to news from the realty sector, Prestige Estates has formed a joint venture with Mumbai based DB Group for a mixed-development project comprising a large hotel and convention centre in Delhi at a total investment of around Rs 20 billion.
The company in a statement said that the 3.5 million mixed-used project would be built over 7.70 acre at Aero city in Delhi. It would house one of India's largest hotels with around 932 keys, a convention facility of over 200,000 square feet, and an office space of around 650,000 square feet.
DB Group had acquired the development rights on the 7.70-acre land parcel in 2009 from Delhi International Airport (DIAL).
Reportedly, both the companies would put in Rs 3.6 billion in the joint venture. The rest of the development cost would be raised through bank loans.
Prestige Estates share price is presently trading up by 1.7%.
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