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Markets continue to languish in red
Mon, 11 Apr 01:30 pm

The benchmark indices in the Indian stock market extended their loss in the last two hours of the trade. Stocks from the auto and realty space are trading weak and those from the FMCG space are trading firm.

The BSE-Sensex is down by 162 points while NSE-Nifty is trading 50 points below the dotted line. BSE Midcap and BSE Small cap indices are down by 0.6% each. The rupee is trading at 44.24 to the US dollar.

Indian Pharma stocks are trading mixed with Natco Pharma and Divi's Laboratories leading the gains. However, Indoco Remedies and Orchid Chemicals are trading weak. As per a leading business daily, the Indian drugmaker Sun Pharma is likely to enter into a marketing tie up with US drug major Merck & Co. The partnership is yet to be announced and confirmed. As per the agreement, Merck will use Sun Pharma's marketing network in India to improve its rank in Indian markets that now stands at 28.

If the partnership happens, it would be second such tie up between a multinational company and domestic drug maker. The first of this kind in India happened this year in January between Bayer AG, a German drug firm and Ahmedabad based Cadila Healthcare. The stock is trading firm.

FMCG stocks are trading mixed as well. Marico, Camlin and Dabur are leading the pack of gainers. The stocks of Gillette India and P&G Hygiene are trading in the red. As per a leading financial daily, Hindustan Unilever is struggling to maintain its market share in the shampoo segment. There are concerns that it is losing out to rivals like Proctor & Gamble and Dabur. As per Nielsen's January-February data, the company which is the market leader in shampoo segment, registered a decline in volumes thus reducing its market share to 47.3% (down by 1.3%) while P&G increased its market share to 17.7% (up 2.4%). Its other major competitor, Dabur, also performed relatively better securing a 6.7% market share (up 0.8%) in the same segment. The total Indian shampoo market is estimated to be worth Rs 30 bn currently. The decline in the market share is despite some volume growth in past few quarters.

In the last couple of years, the company has revamped its entire portfolio in an effort to attract customers. It has been heavily spending on advertising and promotional activities in the last one year. There is a concern that it will lose out to rivals in its other core segments as well like soaps and detergents. The company has recently hiked prices on its soap brands by upto 10%. The stock of HUL is trading in the red.

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