Indian share markets remain buoyant

Wed, 21 Nov 01:30 pm

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Backed by buying in index heavyweights, Indian share markets continued to trade above the dotted line in the last two trading hours. Majority of the sectoral indices are trading positive with consumer durables, FMCG and realty stocks leading the gains. Power, capital goods and auto stocks are among the few trading in red.

Sensex today is up 57 points and NSE-Nifty is trading up by 14 points. While BSE Mid Cap index is marginally down, the BSE Small Cap index is trading up by 0.1%. The rupee is trading at 55.3 to the US dollar.

Majority of the FMCG stocks are trading positive with Hindustan Unilever (HUL) and Colgate leading the gains. According to a leading financial daily, sales of fast moving consumer goods (FMCG) through the chemist retail channel are growing faster than the other traditional trade channels. And apart from diapers, deodorants and milk foods, chemists are increasingly stocking impulse products such as salty snacks, chocolates and biscuits. A study by market research firm Nielsen states that the contribution of chemists to overall FMCG sales grew at a compounded annual growth rate of 21% in the last two years as compared to a growth of 16% clocked by the other traditional trade channels over the same period. As per the same study, chemists account for 9.1% of overall FMCG sales which is 45% higher than modern retail. The research firm estimates the FMCG market size of chemists to double to $6 bn by 2016. Sensing the growing role of chemists, FMCG companies like Hindustan Unilever, Cadbury and L'Oreal are increasingly utilizing this sales channel to drive sales of their products.

Most of the auto stocks are trading negative with Ashok Leyland and Hero Motocorp being the biggest losers. As reported by the Business Line, auto manufacturer Mahindra and Mahindra is open to more acquisitions. While the company did not comment on the news of it being one of the few companies in the race to acquire Aston Martin, the company's management mentioned that due to the success of the buyouts in the past, it is open to more acquisitions in the future. An example cited is that of SsangYong. Discussing the latter, M&M believes that the turnaround in SsangYong is expected to be much before than what was initially planned. Given that the demand for utility vehicles and sports utility vehicles has been booming in India, M&M's product portfolio has done well. During the month of October 2012, the UV segment is believed to have grown by about 22 % on a year on year basis.