Flat with a positive bias

Fri, 3 Dec 11:30 am

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After starting today's session on a negative note in the morning Indian indices have managed to recoup initial losses. Other key Asian markets too are trading firm. Currently, heavyweights in the Sensex are trading mixed with stocks from IT and auto space registering strong gains. However, stocks from the realty and consumer durables space are trading weak.

Currently, the BSE-Sensex is trading up by around 36 points, while the NSE-Nifty is down by about 4 points. However, buying interest amongst the mid and small cap stocks is muted with the BSE-Midcap and BSE-Smallcap indices trading lower by 1.1% and 1.4% respectively. The rupee is trading at 45.10 to the US dollar.

FMCG stocks are trading firm led by HUL and Nirma. However, Paper Products is trading weak. Godrej Consumers Products Ltd (GCPL) has acquired two iconic brands, Genteel and Swastik Shikakai from Muskan Projects Pvt Ltd. Both Genteel and Swastik Shikakai have been operating in Indian markets for decades and have a joint turnover of Rs 300 m. As per industry sources the consideration for buying the two brands is around Rs 500 m. Acquisition of Swastik Shikakai will provide GCPL a presence in niche market while the addition of Genteel to the portfolio would provide the company with a market share of nearly 90% in the liquid detergent market. It may be noted that over the last five years GCPL has been on acquisition spree. While most of the inorganic growth has been in the international markets considering the huge the opportunities on floor in the domestic markets the company now seems to be focusing on the acquiring companies within the borders as well.

Auto stocks are trading weak led by Eicher Motors and Ashok Leyland. However, Bajaj Auto and M&M are trading strong. After the dwindling sales of Nano, the world's cheapest car, Tata Motors has undertaken a campaign to promote and market the Nano brand. The initiatives include facilitating better co-ordination between banks and customers, tie-ups with regional financial institutions and opening newer avenues for better reach, amongst others. The move was strategized by the top management after staggering drop in sales of Nano, from about 9,000 units in June to about 509 units in November. It seems that financing is one of the biggest trouble areas for the Tata Motors right now and thus the company is trying to improve the interaction between the financier and the customer. It may be noted that currently, Nano is on sales in 12 states, with the rest of states expected to be added before December.