Indian stock markets traded weak during the previous two hours of trade on the back of selling activity witnessed mainly in IT and Oil and gas stocks that have high weightage in the indices.
The BSE-Sensex is trading down by 163 points and NSE-Nifty is trading weak by 40 points. BSE Mid cap index is trading flat and BSE Small cap index is trading down by 0.1%. The rupee is trading at 51.80 to the US dollar.
FMCG stocks are trading mixed with Paper Products and Camlin Ltd. leading the pack of gainers and Archies Ltd. and Colgate trading the weakest. Fears of slowdown were quelled again after a survey conducted by market research agency IMRB (Indian Market Research Bureau) showed rural demand growing faster than its urban counterpart. As per the survey which was conducted across 30 product categories, the rural FMCG market grew 10% by volume and 12% by value during the period January-October 2011. The growth was driven by food & beverage categories such as noodles, macronis and soft drinks. The urban FMCG market grew by relatively slower 4% in volume terms and 7% in value terms during the same period. Increased offtake in categories such as ready-to-eat mixes, breakfast cereals, soups and deodorants fuelled growth in urban India. To meet the growing rural demand for packaged fruit juices, Dabur has expanded distribution reach in smaller cities. Even FMCG biggies such as ITC and Hindustan Unilever (HUL) are utilizing their wide distribution network to increase penetration of soups and noodles in rural regions.
IT stocks have been trading in the red led by Tata Consultancy Services (TCS) and Infosys. As per a leading financial daily, Wipro expects to earn US$ 500m through its consulting business over the next three years if it continues to grow at the current pace. The company had started its operations in consulting segment almost three years ago and since then, its share in the overall IT business has been consistently increasing. Currently, consulting units contribute 3.1% to the IT business. The company has been quite aggressive in hiring more consultants in the past two years and has witnessed over 35% compounded annual growth rate in the segment over this time. As per the management, the company plans to treble its number of consultants from 1,500 to 5,000.The stock was trading in the red.