Thursday March 27, 11:00 AM
Weak start! |
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By Equitymaster.com
Tracking its global counterparts, the markets have opened on a weak note with the Sensex and the Nifty losing almost 1% in early morning trades. Currently, while stocks across sectors are witnessing selling pressure with software and power stocks bearing most of the brunt, pharma stocks have moved up marginally. The overall market breadth is negative with losers outnumbering gainers in the ratio of 1.2:1 on the NSE.
The BSE Sensex is trading at 15,942 (down 145 points) while the NSE Nifty is trading at 4,807 (down 22 points). The rupee is trading at 39.93 to the dollar.
Auto stocks are trading weak with Tata Motors (down 4%) and Maruti (1%) being the key losers. Tata Motors have announced the acquisition of Ford Motor's Jaguar and Land Rover luxury brands yesterday evening. Tata Motors will pay Ford US$ 2.3 bn in cash while Ford will pay about US$ 600 m to the Jaguar-Land Rover pension funds. This is the largest acquisition by an Indian company in the automobile segment. The purchase price is less than half of what Ford paid (US$ 2.5 bn each) to acquire Jaguar in 1989 and Land Rover in 2000 from BMW. The deal will extend Tata Motors' product portfolio span from a price point of US$ 2,500 to US$ 170,000 and expand its distribution network by more than four times to 2,700 outlets in 138 countries. Tata Motors will raise US$ 3 bn through bridge finance for 15 months to finance the deal, which will be replaced by a combination of long-term debt and equity. The company is also planning to raise money through equity divestment in some Tata Motors subsidiaries in the next few months.
The US market closed in the negative territory yesterday with all the three major indices namely the Dow Jones, the S&P 500 and the NASDAQ losing 1% each. The European indices also declined by 0.5% and the Asian indices are currently trading weak except for Hang Seng, which has moved up marginally. The Nymex crude rose sharply by US$ 4.58 to close at US$ 105.8 per barrel and the Comex gold gained US$ 14.2 to close at US$ 949.2 an ounce.
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