After starting today's session on a negative note amidst weighing tensions in Libya, Indian indices fail to gather any momentum and are currently trading in the red. Stocks from Auto and Consumer goods space are trading weak while those from Consumer durable space are trading firm.
Currently, the BSE-Sensex is down by 65 points while NSE-Nifty is trading 32 points below the dotted line. BSE Midcap and BSE Small cap indices are both down by 0.35% and 0.15% respectively. The rupee is trading at 45.24 to the US dollar.
Energy stocks are trading weak with IOC and Petronet LNG leading the pack of losers. However, RIL and Cairn India are trading strong. Global oil major BP is expected to buy 30% stake in RIL's 23 oil & gas blocks including the most coveted KG-D6 block for US$7.2 bn. Apart from this, there are various contingent future performance payments based on exploration success resulting from oil discoveries. The two companies will also enter into a JV for sourcing and marketing gas which will enable the creation of necessary infrastructure for receiving, transporting and marketing natural gas in India. The partnership will create synergistic benefits by combining BP's deep water exploration capabilities with RIL's project management and operational expertise. The deal will also strengthen India's energy security, as the country depends on imports to meet majority of its energy needs. It may be noted that prior to BP, RIL also had a detailed discussion with Exxon Mobil and Shell but could not get through the deal due to its dispute with ADAG on pricing of gas.
Consumer goods stocks are trading mixed with Camlin and Godrej Consumer Products Limited trading firm while Henkel India and Dabur are trading weak. As per a leading financial daily, Godrej Consumer Products Limited is looking at increasing price of soaps to offset rising input costs. The rising price of vegetable oil is forcing the company to protect its margins through efficiencies in manufacturing, distribution and price hikes. However, if vegetable oil rises sharply then the company would go for another round of price increases. Nevertheless, the company is not looking at cutting retailer's margins. It may be recalled that Godrej had raised prices of its soap brands like Cinthol and Godrej No. 1 by 3-5% early last month. The company had also raised the prices of its hair color products by 10% around 3 months back.