Mumbai: Europe’s debt travails are intensifying. The debt crisis is now at Germany’s door step as a bond auction was left uncovered. Germany had to keep back nearly half of the 6 billion euros worth bonds on sale because of too few bidders pushing up the borrowing cost to a 10-year high. Bond yields in France and Belgian also zoomed.
Overnight in the US, markets ended sharply lower as investors were spooked by European debt concerns and soft economic data from China. The Dow Jones Industrial Average fell 2.1%, the S&P 500 Index lost 2.2% and the Nasdaq Composite declined 2.4%.
Asian markets continued to extend their losing streak following weak cues from the US. Japan’s Nikkei Stock Average plunged 2% after returning from a one-day holiday; exporter and resources shares were leading the losses. China’s Shanghai Composite and the Hong Kong’s Hang Seng Index also dipped 0.7% each.
Back in India, Tata Group shares will be in focus today after Tata Sons named Cyrus Pallonji Mistry as the successor to chairman Ratan Tata. The successor was named after a long search. Tata group played its cards safe as they decided to pick a member of the family. Mistry is the younger son of Pallonji Shapoorji Mistry, the construction tycoon who has a 28% stake in Tata Sons.
SKS Microfinance will continue to remain in focus for the second consecutive day after chairman Vikram Akula resigned. P.H. Ravikumar, an independent director, was appointed as the interim non-executive chairman.
The struggling aviation sector can take a breather now because the Directorate General of Foreign Trade may allow all airlines including Kingfisher to import fuel directly. This will help them avoid steep sales tax that ranges up to 3-30%. The debt ridden airlines will be able to save on fuel costs which are spiraling higher.
The cabinet has decided to bite the bullet and raise the limit on the much awaited foreign direct investment in single brand retail to 100 percent from the current 51 percent. Also, at present the government allows 100 percent FDI in wholesale retail. Most of the retail stocks – Shopper’s Stop, Trent and Pantaloon Retail may benefit from this move.
Lastly, everyone wants to know what Rakesh Jhunjunwala is buying and selling, but little is known about Bollywood icon, Amitabh Bacchan’s investments. Surprisingly, Amitabh Bachchan has made some investments in the bearish markets. Last week, the actor bought three lakh shares of Fineotex Chemicals from the open market. The actor also holds significant stakes in Birla Pacific Medspa and Neuland Labs.