The Indian markets have started on a strong note. The benchmark indices opened near the breakeven mark, but soon managed to surge into the positive territory where they have stayed since then. Asia is currently trading in the green with Hong Kong (up 1.6%) leading the pack of gainers. The US markets closed higher by 1.5% yesterday.
Currently, in India, heavyweights from the BSE-Sensex are trading in the green with metal stocks leading the pack of gainers. The BSE-Sensex is trading higher by 147 points, while the NSE-Nifty is up by 40 points. Buying interest is also being witnessed among mid and small-cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.9% and 0.8% respectively. The rupee is trading at 46.29 to the US dollar.
FMCG stocks have opened the day on a mixed note. Gainers here include Marico and Pidilite. However, Gillette India is in the red. As per a leading business daily, Marico has bought Colgate Palmolive's hair care brand Code 10. It is the third-largest selling brand in Malaysia. However, the value of the deal has not been disclosed. In our view, this development is part of the company's strategy to push for revenue growth in South-East Asia. It also consolidates its position with an eye on fighting future competition in India. Interestingly, Marico does not plan to launch the product in India with the same branding. It may be noted that Indian FMCG majors have been on an international buying spree in the last couple of years. Marico itself had acquired Egypt based Hair Code in 2009.
Energy stocks have opened the day on a mixed note. Gainers here include Chennai Petro and Reliance. However, HPCL and BPCL are in the red. As per a leading business daily, Reliance Industries has raised Rs 27 bn by selling shares held by its treasury. Reliance's treasury stock or about 26 m shares was created following the merger of Reliance Petroleum with Reliance Industries. The shares were sold to Life Insurance Corporation. The most likely use of the funds would be to buy LyondellBasell, the bankrupt petrochemical major that Reliance Industries is trying to acquire. It was earlier estimated that the deal would cost around US$ 12 bn. However, LyondellBasell has filed a revised plan with its bankruptcy court which is likely to raise the acquisition cost.