The BSE Sensex and NSE Nifty opened in red on Thursday tracking weak global markets. (Photo: PTI)

9.59 am: 

9.48 am: The rupee turned weak in early trade today and fell by 32 paise to 66.73 against the US currency at the Interbank Foreign Exchange on foreign fund outflows amid appreciation in the US currency overseas. The NSE Nifty index was down 111 points at 7,706.

9.45 am: Share price of IL&FS Transportation Networks gained over 2 per cent in the morning trade on Thursday after the company informed BSE that the Concession Agreement for development of 4-laning of Amravati-Chikhli (Package-I) section of NH-6 in the State of Maharashtra from Km 166.000 to Km 360.000 has been signed by Amravati Chikli Expressway Limited, a wholly owned subsidiary of the company with National Highways Authority of India on Build Operate Transfer (BOT) basis on September 08, 2015. Sensex was down 361.62 points at 25,357.

9.25 am: Bharti Airtel, India’s largest telecom service provider, has entered into an exclusive discussion with Axiata Group Berhad (Axiata) to explore the possibility of combining the business operations of their telecommunication subsidiaries in Bangladesh; namely, Robi Axiata and Airtel Bangladesh. There is no certainty that this discussion will lead into the execution of binding definitive agreements between the parties. Share price of Bharti Airtel was down 1.72 per cent at Rs 349.10 in the early trade. Sensex was down 323.10 points at 25,396.

9.20 am: Sensex was down 406 points at 25,313. Dr Reddy’s Laboratories has entered into a multi-country supply and licensing agreement with PanTheryx, Inc., a global medical nutrition company based in Boulder, Colorado. The agreement grants Dr Reddy’s the exclusive right to market and distribute PanTheryx’s breakthrough nutritional intervention, DiaResQ, for infectious diarrhea in India and Nepal and in process for Russia, Myanmar, Vietnam, Ukraine, Sri Lanka, Kazakhstan, Belarus, Jamaica, and select LATAM markets. The pharma major will market the product in India and Nepal under the ‘Reliqua’ brand. Dr Reddy shares were trading 1.18 per cent lower at Rs 3,990.60 apiece in the early trade.

The BSE Sensex and NSE Nifty opened in red on Thursday tracking weak global markets. The BSE Sensex opened 196.62 points lower at 25,522.96. NSE Nifty opened 89.55 points down at 7729.05.

All the sectoral indices on Bombay Stock Exchange (BSE) also opened lower than their previous close.

Asian stocks fell on Thursday after lacklustre Chinese and Japanese economic data added to heightened worries about slackening global growth, sapping investors’ appetite for riskier assets.

Back home, domestic equity markets gained over 1.50 per cent on Wednesday on the back of positive feelers from global markets and a slew of reforms.

Global Markets

New York: US stocks ended more than 1 per cent lower on Wednesday after rallying the day before, led by declines in shares of Apple and energy companies, which fell with oil prices.

London: Britain’s top stock index rallied on Wednesday for a third straight session, boosted by encouraging corporate news from mining companies and financial firms and gains in Asian markets

Tokyo: Japan’s Nikkei fell on Thursday as a surprise drop in machinery data heightened concerns about the economy, further spooking investors who rushed to book profits a day after the market posted its biggest one-day gain in nearly seven years.

Hong Kong: The Hang Seng Index was down 2.30 per cent.

After the superb performance in Q1, our optimistic view on Maruti Suzuki has further strengthened as the y-o-y growth in volumes in the domestic markets is robust at ~14% YTD.

The company has also maintained its promise of launching at least one model every year. After the Celerio launch last year, it launched Ciaz and now the SUV S-Cross, which is getting a good response. Going forward, the company is coming with an LCV and a hatchback in the ensuing quarters/year.

We expect a strong festive season on the back of improving demand for cars and the low base in line with the spreading out of festive season this year.  With improving macros such as reducing fuel costs, expectations of a rate cut in the upcoming RBI policy meet, wide product portfolio, attractive pricing, a made for India psyche associated with the company and a deeply entrenched distribution network, we believe that MSIL is better placed than its peers although they come out with new launches.

On the margin front, lower RM costs, lower discounting, better product mix and currency benefits will continue to assist margin improvement. After the current fall in the stock, we believe MSIL looks attractively poised as far as valuations are concerned (18.6x FY17E earnings). We maintain ‘buy’ with a target price of Rs 4,891.

Due to relatively better economic fundamentals — including a less volatile domestic currency and better GDP growth momentum — compared to EM peers, the Indian market is touted to benefit from a stronger investor interest.

However, given that the Indian market already commands an overweight since the last one year after the BJP government came to power, a considerable exodus of foreign investment in the wake of a US Fed rate hike can’t be ruled out.

The retreat of foreign portfolio investment (FPIs) in the last one month seems to be supporting this premise even as nothing incrementally negative India-specific factor has played a role behind this liquidation. Since mid-August after China started devaluing yuan, close to $3.4 billion of FPI money has exited India. The change in sentiment is well reflected by a turnaround in their investing. As against buying of $23 million worth of India shares in mid-August, FPIs have been selling $175 million worth of equities on an average in 21 days.

According to Credit Suisse, high FII ownership of Indian stocks is an overhang for the Indian market. Data compiled by FE show that FIIs collectively own close to 17% stake in the BSE-200 universe, with there being as many as 81 companies where they enjoy at least 20% ownership. Credit Suisse, in a recent report, pointed out that falling commodity prices, which stand close to their 2004 levels, are changing trends in trade and capital flow. It notes that oil producers, who earlier exported capital through sovereign wealth funds, are currently facing a combined current account deficit of $100 billion against a $0.5 trillion of surplus, thanks to a near-50% collapse in crude oil pries in the last one year. In this scenario, capital flow from these countries may be reversing and not just slowing, it argues.

“As flows reverse, the seller could be price insensitive, and stocks with the highest rise in FII ownership, of late, could have an overhang,” adds the CS report dated August 31. The brokerage has listed several stocks, which, due to higher FII ownership, may witness selling pressure in the near future. The list includes Tech Mahindra, Eicher Motors, HDFC, Page Industries, Lupin, Idea Cellular and Adani Ports and SEZ  that have seen FII ownership increase anywhere between 10% and 31% since March 2011.

As a crisis continues at Amtek Auto, markets regulator Sebi has begun a probe into alleged share price manipulation at its listed subsidiary Castex Technologies through forced conversion of foreign bonds.

Auto component maker Amtek is grappling with financial issues and its shares have also taken a beating in recent weeks, while exposure to its bonds have created ripple effects in the mutual funds and other market segments as well.

Sources said Sebi is seriously looking into the matter following allegations by some bondholders that efforts are being made to manipulate the share price of Castex Technologies by forcibly asking investors to convert their bonds.

In the wake of these complaints, the watchdog has started a probe into the issue, they added.

Both Amtek Auto and Castex Technologies could not be immediately contacted for their comments.

On July 31, Castex Technologies informed the BSE that its board of directors has decided to mandatorily convert all the outstanding bonds of USD 80.80 million out of FCCB (Foreign Currency Convertible Bond) issue of USD 130 million.

The conversion date for conversion of bond into equity shares, would be September 10, 2015, it had said.

“The board has also decided to mandatorily convert all the outstanding bonds of USD 56.60 million of FCCB issue out of USD 70 million. The conversion date for conversion of bond into equity shares, would be September 25, 2015,” the filing made in July had said.

Besides, the company’s board had approved issuance of mandatory conversion notices, in terms of the bond documents.

Shares of Castex Technologies dropped nearly five per cent to close at Rs 42.45 on the BSE today.

Amtek Auto, in August, had said that “there is temporary cash flow mismatch in the company.”

Last month, JP Morgan Mutual Fund restricted redemptions from two of its debt schemes u2014- Short Term Income Fund and India Treasury Fund.

The move came in the wake of a decline in NAVs (net assets value) of the schemes due to fund house’s exposure to Amtek Auto’s debt papers. These schemes have a collective exposure of about Rs 200 crore in Amtek Auto.

Hero MotoCorp shares rose as much as 2.27 per cent intraday on Wednesday after the company informed stock exchanges that it has inaugurated its first global manufacturing facility at Villa Rica, in Colombia. (Express Photo)

Hero MotoCorp shares rose as much as 2.27 per cent intraday on Wednesday after the company informed stock exchanges that it has inaugurated its first global manufacturing facility at Villa Rica, in Colombia.

Completed in a little over nine months since construction began, the Colombia plant is Hero’s 5th manufacturing facility, in addition to four assembly plants in India. This Plant will act as a hub for selling to the Andean countries. It can also be a strategic base for shipping to North American markets such as Mexico and the US.

At 1.00 pm, the share price of Hero MotoCorp was trading 1.84 per cent higher at Rs 2,359.95 on BSE. It opened at Rs 2,328.05 and had touched a high and low of Rs 2,369.80 and Rs 2,328.05, respectively, in trade so far. Sensex was up 1.87 per cent at 25,799.52.

In a BSE filing, the company said, “Spread over 17 acres (68,000 sq meters) of land at the Parque Sur free trade zone at Villa Rica in the state of Cauca – about 500 km south-west of Bogota, the plant will have an initial production capacity of 80,000 units per annum. This capacity will be expanded to produce 150,000 units per annum, in the next phase. The plant has been built at a project cost of $70 million of which $38 million has been utilized in CAPER and rest will be used as working capital over the next few years.”

With the commencement of operations at the manufacturing plant in Colombia, the New Delhi-headquartered Hero MotoCorp has become the first Indian two-wheeler manufacturer to set-up a manufacturing plant in Latin America.

Currently Hero sells its range of two-wheelers through 160 outlets spread across 133 cities and towns in the country. Hero has rapidly augmented its network by adding 69 outlets in 2015 alone. Some of the bestselling Hero products include – the 100cc Splendor iSmart, Eco Deluxe, and Passion-Pro; the 125cc Glamour; the 150cc Thriller and the 225c Karizma ZMR. Hero is also the only two-wheeler manufacturer to offer a 4 year warranty on all its models.

The promoters holding in the company stood at 34.64 per cent while institutions and non-institutions held 51.89 per cent and 13.47 per cent, respectively.

For the quarter ended June 2016, the company posted net profit of Rs 750.34 crore, up 33.33 per cent, against Rs 562.76 crore in the corresponding quarter a year ago.