Maruti Suzuki Manesar factory will remain closed on Thursday, a company spokesman said, following the violent clashes at the plant. Maruti Suzuki shares dropped over 6% today after India’s largest auto maker stopped production at one of its factories following violent clashes between workers and managers. Agitating workers burnt down the administration wing of the plant. One person was killed and at least 40 were injured on Wednesday in a clash between workers and the managerial staff at the Maruti Suzuki Manesar plant, forcing stoppage of work. Workers stalled production and also burnt a few cars parked outside the factory after the Maruti Suzuki administration suspended a worker from the quality department in the afternoon after an alleged altercation he had with the managerial staff.
Haryana police had to cane charge the workers to evict them from the Maruti Suzuki factory and by the time of going to the press, over 3,000 workers were moved out of the Maruti Suzuki Manesar plant. Sources informed there has been considerable damage inside the Manesar unit. Parked vehicles were set on fire by workers. Any sustained shutdown of the Maruti Suzuki Manesar factory in north India would be a blow for the carmaker, which lost over $500 million worth of production last year due to weeks of labor unrest at the same plant. According to Press Trust of India, the workers alleged that the fight began after a supervisor made casteist remarks against a worker. Haryana Chief Minister Bhupinder Singh Hooda has also promised stern action against the culprits. Work at the Manesar plant had to be stopped following the violence. The Gurgaon Maruti Suzuki plant continued normally.
Labor unrest not new in Maruti Suzuki Manesar plant:
Labor unrest is not a new phenomenon in Manesar Maruti Suzuki plant which mainly produces the popular Maruti Swift & Maruti Dezire models. Maruti Suzuki suffered losses last year when workers had gone on an indefinite strike to form an independent union at the same plant. While the company suffered a production loss of about 80,000 cars in the 59 days of strike, the direct revenue losses were pegged at 2,500 crore in the last fiscal year.
Sustained buying of Indian stocks by foreign funds:
Foreign institutional investors (FIIs) are buying Indian stocks this month. FIIs bought shares worth a net Rs 276.40 crore on Wednesday, 18 July 2012, as per provisional data released by the stock exchanges. Earlier, FIIs bought shares worth a net Rs 4644.50 crore from the secondary equity markets during 11 trading sessions from 3 July 2012 to 17 July 2012, as per data from Securities & Exchange Board of India (Sebi).
Equity Markets Rise: The 30-share BSE Sensex gained more than 129 points in early trade today, taking yesterday’s up-move further due to positive global cues. BHEL and L&T gained 1.5-2% as the cabinet is likely to discuss today a proposal to impose 21% duty on equipment imported for power generation. JP Associates and Sterlite were up over 2%. Sesa Goa, Hindalco Industries, Tata Power, Tata Motors, SBI, Axis Bank, ICICI Bank, M&M, DLF and IDFC went up over 1%. SAIL, HUL and ITC were up 0.5%.
Key benchmark indices edged higher yesterday on expectations that the government will kick-start economic reforms after the upcoming presidential election. The S&P CNX Nifty advanced 23.45 points or 0.45% to settle at 5,216.30, its highest closing level since 13 July 2012. The Nifty hit an intraday high of 5,222.85. The index hit a low of 5,169.05 in intraday trade, its lowest level since 28 June 2012. The BSE Sensex jumped 79.71 points or 0.47% to settle at 17,185.01. Interest rate sensitive realty shares rose on renewed buying.
Presidential Election in India Today.
Election for the country’s new President takes places today, 19 July 2012, in what is a direct contest between ruling United Progressive Alliance (UPA) candidate Pranab Mukherjee and opposition-backed Purno Sangma.
US Federal Reserve Chairman Ben Bernanke Speaks:
Federal Reserve Chairman Ben Bernanke spent a second day testifying before Congress on monetary policy and theUSeconomy. Bernanke’s prepared testimony before the House Financial Services Committee on Wednesday was virtually identical to his presentation to the Senate Banking Committee on Tuesday. He said, “At this point we don’t see a double dip recession. We see continued moderate growth. But we are very committed to ensuring, or at least doing all we can to ensure, that we continue to make progress on the employment side. And we have stated that we are prepared to take action as needed to try to make sure that we see continued progress on employment. I wouldn’t want to rule out regulatory and tax factors in part of the uncertainty… It’s possible that some of these regulations have some impact on the cost of credit but there have been a lot of analysis that suggests that the benefits in terms of reducing the risk of a financial crisis are extremely large and that whatever costs are involved are worthwhile.”
Asian stocks rose on Thursday after strong US housing data overnight and after broadly reassuring comments from Federal Reserve Chairman Ben Bernanke in his second day of testimony to Congress on Wednesday, 18 July 2012.