Asian stock markets are trading on a mixed note after it was reported that the Federal Reserve is likely to deliver a hike in US interest rates and perhaps signal that as many as three more lie in store for the rest of the year. The Nikkei 225 is down 0.89% while the Hang Seng is up 0.34%. The Shanghai Composite is trading up 0.16%. Over the weekend, US stocks closed mostly in green.

Meanwhile, Indian share markets have opened the day on a flat note. BSE-Sensex is trading higher by 53 points and NSE-Nifty is trading higher by 20 points. S&P BSE Mid Cap is trading higher by 0.3% and S&P BSE Small Cap is trading up by 0.4%.

Gains are largely seen in capital goods stocks, consumer durables stocks and pharma stocks. The rupee is trading at Rs 64.87 against the US$.

The Market cap to GDP ratio for Indian companies is close to dangerously high levels. While this is still some way off the peak of FY-08, when it had once reached close to 150, it's relatively high.

FY17 saw this ratio reach close to 80. It is also expected to increase further given the moderate growth expectations in India's GDP for FY18. Warren Buffett once considered this as one of the best valuation metrics to gauge the markets.

The Warren Buffett Indicator Suggests Indian Equity Market Is Overvalued

Past history shows some correlation between the ratio and the share market. 2008 saw Sensex decline by 38%, when this ratio crossed the 100 mark. Also, the market has bounced back sharply when this ratio was low.

The basic assumption in this ratio is that whenever the GDP of the country grows, the market performance will reflect it. Also, when stocks do well, it can be extrapolated to assume the Indian economy is doing well.

In news from energy sector, as per a leading financial daily, State-owned Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) may buy 26% stake each in gas utility GAIL India Ltd, paying the government over Rs 200 billion each to become integrated energy firms.

As per the reports, the government was not looking at actual merger of oil companies but only transfer of its ownership to a cash rich PSU, the best option would be to split the 54.89% holding in GAIL equally between IOC and BPCL.Following Finance Minister Arun Jaitley's 2017 Budget announcement of creating integrated oil majors, IOC and BPCL had submitted separate proposals to buy the government's 54.89% stake in GAIL.

The move comes after Oil and Natural Gas Corp (ONGC) bought out government's 51.11% stake in refiner Hindustan Petroleum Corp Ltd (HPCL) for Rs 369.15 billion.

Finance Minister in 2017-18 budget had unveiled government's plan to create integrated public-sector oil majors "through consolidation, mergers and acquisitions".

IOC share price and BPCL share price opened the trading day down by 1.2% and 1.6% respectively by while GAIL share price opened up by 0.7%.

In another development, as per an article in The Livemint, Reliance Industries Ltd (RIL), Essar Oil Ltd, ONGC and Torrent Power Ltd are among companies planning to bid for the ninth round of city gas distribution (CGD).

The Petroleum and Natural Gas Regulatory Board (PNGRB) will offer compressed natural gas retailing licences in 100 cities. Companies which win CGD licence for a city would have eight years of marketing exclusivity in that city.

Moving on to news from automobile sector. As per an article in The Economic Times, Tata Motors plans to bring in new products in order to have presence in around 95% of Indian passenger vehicles market by 2020.

The company currently sells a range of vehicles from hatchback to SUVs playing in about 70% of the market in India. With the addition of new products and enhanced play in the segment, the company would be able to ramp up its market share, which currently stands at around 7%.

Besides, the company is also working on offering "electric solution" on most of its portfolio going forward.

Currently, Tata Motors offers only Tigor with electric powertrain in passenger vehicles segment. It is also planning to come out with an electric version of its compact hatchback Tiago.

Tata Motors share price opened the day up by 0.5% on the BSE.

In another news, as per The Economic Times, Mahindra & Mahindra (M&M) and Ford India are likely to formalise a memorandum of understanding that they signed six months ago and establish a partnership in the coming week to 10 days.

The companies are likely to share vehicle architecture, electric powertrains, common sourcing and leverage each other's distribution network in the first phase.

Mahindra & Mahindra entered into the accord with Ford Motor Co to explore cooperation in the sphere of products, technologies and distribution, including mobility programs, connected vehicle projects and electrification of cars.

Apart from giving access to each other's vehicle architectures, powertrains and sourcing, Ford India is also likely to tap into the wide distribution network of Mahindra & Mahindra in the hinterland to access new markets.

M&M share price opened the trading day up 1%.