Fear Fac­tor: Mar­kets Fall on Global Cues

Bench­mark in­dices ex­tend losses to fifth con­sec­u­tive day; for­eign in­sti­tu­tions move to safer as­sets

The Economic Times - - Front Page - Our Bu­reau

The bear grip on the do­mes­tic eq­ui­ties in­ten­si­fied with bench­mark in­dices ex­tend­ing losses to the fifth con­sec­u­tive day on Fri­day as ris­ing US-North Korea ten­sions con­tin­ued to roil global mar­ket sen­ti­ment. Clos­ing at an over one-month low, the in­dices slipped more than 1% each on heavy sell­ing from for­eign in­sti­tu­tions, which are flee­ing the riskier emerg­ing mar­kets to safer as­sets like US trea­sury bonds and gold. Sen­sex and Nifty slipped 3.5% this week, their worst weekly per­for­mance in 18 months.

The Sen­sex ended down 317.74 points, or 1%, at 31,213.59 and the Nifty lost 109.45 points, or 1.1%, to close at 9,710.80 af­ter breach­ing 9,700 dur­ing the ses­sion. Af­ter fal- ling 4-5% in the first four ses­sions of the week, BSE mid-cap and small-cap in­dices fared rel­a­tively bet­ter than large-caps on Fri­day, end­ing down only 0.2%. Fear gauge In­dia VIX jumped above the 15level for the first time since Fe­bru­ary, end­ing up 10% at 15.19. Among other Asian mar­kets, stocks ended weak with Hong Kong’s Hang Seng fall­ing the most by 2%. Gold touched the high­est in more than two months on Fri­day.

At home, for­eign port­fo­lio in­vestors sold shares worth .₹ 1,943.86 crore while do­mes­tic in­sti­tu­tional in­vestors bought shares worth .₹ 2,016.84 crore. SBI was the worst per­former on Sen­sex, end­ing down 5.4% to .₹ 280.65 due to weak re­sults.

Van­gaal ex­pects the seg­ment sales to reach 1.4 mil­lion units by 2020, or even 1.5 mil­lion “with the kind of in­ter­est that new en­trants are show­ing in the seg­ment”.

In fact, Maruti Suzuki and Hyundai Mo­tor which to­gether ac­count for about a third of the pas­sen­ger ve­hi­cle mar­ket in In­dia are also heav­ily fo­cus­ing on the SUV seg­ment, with mod­els such as the Vi­tara Brezza and Creta.

The car­mak­ers that are fi­nal­is­ing their plans to en­ter In­dia have all be­gun work on their SUVs for this mar­ket. They are ex­pected to launch more than half a dozen prod­ucts in the ₹ 6-25 lakh price range, in­dus­try ex­ec­u­tives said.

MG Mo­tor In­dia, the sub­sidiary of China’s Shang­hai Au­to­mo­tive, may be­come the first among the lot, with a C seg­ment SUV to take on the newly launched Jeep Com­pass in 2019, and a B seg­ment com­pact SUV a year later to take on the Hyundai Creta. The com­pany is very close to seal­ing a deal to take over US part­ner Gen­eral Mo­tors’ fac­tory at Halol in Gu­jarat.

MG Mo­tor ex­ec­u­tive di­rec­tor P Bal­en­dran said the com­pany is look­ing at var­i­ous pro­grammes in­clud­ing an SUV for In­dia. “But prod­ucts are yet to be fi­nalised. It may only hap­pen af­ter the Halol plant agree­ment is signed,” he said.

South Korean ri­val Kia has plans of in­tro­duc­ing a Creta com­peti­tor in late 2019, while Changan and PSA, too, are eye­ing the same seg­ment that has be­come a hot sell­ing propo­si­tion in Rs 8 lakh to Rs 15 lakh with sedans tak­ing a back seat there. See­ing the growth in the SUV space, Beiqi Fo­ton, China’s largest com­mer­cial ve­hi­cle maker, de­cided to change track and, in­stead of launch­ing trucks in In­dia, is work­ing on vans and SUVs for the coun­try un­der the Borg­ward brand. It plans to launch a big van to take on Force Mo­tors’ Tempo Trav­eller and a C seg­ment SUV to take Jeep Com­pass and Mahin­dra XUV. While com­pa­nies like MG Mo­tor are eye­ing a top-down ap­proach for In­dia — en­ter­ing the mar­ket with a pre­mium prod­uct — PSA is look­ing to bring an en­try-level SUV post the strong ac­cep­tance of ri­val Re­nault’s Kwid, to also take on the KUV and Maruti Suzuki Ig­nis.

“We will re­ally look at both es­tab­lished seg­ment as well as those which are grow­ing the fastest. There­fore… if we bring three to four mod­els, at least one of them has to be a CUV or SUV, that is a min­i­mum, be­yond that it is too early to say,” Eman­neul De­lay, ex­ec­u­tive vice-pres­i­dent for the In­dia Pa­cific re­gion at PSA, told ET ear­lier this year.

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