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Banking and metal weigh on index
Wed, 5 Jan 11:30 am

Indian indices are trading weak on profit booking in heavy weights over the previous two hours of trade. Stocks from banking and metal space are trading weak while stocks from oil & gas and pharma space are trading firm.

The BSE-Sensex is down by 92 points while NSE-Nifty is trading 41 points below the dotted line. BSE Midcap is trading down by 0.3% while BSE Small cap index is trading flat. The rupee is trading at 45.16 to the US dollar.

Food companies are trading mixed with Lakshmi Energy and GSK Consumer trading firm while Wadala Commodities and Golden Tobacco are trading weak. As per a leading financial daily, Kraft has filed a case against Britannia for violation of trade and copyright of its popular Oreo cookies. Kraft has sought an injection to stop Britannia from manufacturing, selling, marketing or advertising any product with any distinctive element of Oreo cookies. As per Kraft, Britannia has copied the specific design etchings, such as florets and inner rings of Oreo cookies. It has also alleged that the brand name, Treat-O, with an emphasis on ‘O’, is inspired by Oreo. Kraft’s lawsuit against Britannia comes at a time when Kraft is exploring options to enter the 110 bn Indian biscuit market. It may be noted that this is the second case in the last 4 years where Britannia is involved in a legal tussle over trademark. The first was when Britannia had sued Danone over alleging trademark infringement of its Tiger biscuit.

Cement stocks are trading mixed with Prism Cement and Heidelberg Cement trading firm while Shree cement and Chettinad Cement are trading weak. As per a leading financial daily, Indian markets may experience a cement oversupply till the end of FY13. As per estimates, the current installed capacity of cement is 280 m tones. This is set to cross 300 m tones by FY12 when the projected demand is expected to be 235-240 m tones. This would result in an oversupply of 60 m tones. It may be noted that the current over supply is 30 m tones and capacity utilization is 78%. The situation for cement manufacturers is even more grim as even the 4-5 m tones pa of exports is not happening due to oversupply and negligible construction in the Middle East. It is believed that unless utilization rates reach 90%, cement manufactures will continue to face margin pressure.

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