After trading in the northern territory during the previous two hours of trade Indian stock market indices have gathered further momentum and are currently trading firm. All the sectoral indices are trading in the green with stocks from IT and Consumer Goods leading the gains.
Currently, the BSE-Sensex is up by 254 points while NSE-Nifty is trading 75 points above the dotted line. BSE Midcap and BSE Small capindices are both up by 0.85% and 0.96% respectively. The rupee is trading at 44.64 to the US dollar.
FMCG stocks are trading firm with Henkel India and Camlin Ltd. leading the gains. Sara Lee Corporation has terminated the license of Godrej Household Products Ltd (GHPL), a subsidiary of Godrej Consumer Products Ltd (GCPL) to sell its shoe care products with Kiwi brands, in India and Sri Lanka. It is believed that Sara Lee will pay GHPL about Rs 1.77 bn for termination of the said license. It may be noted that GHPL had been selling Sara Lee brands under a licensing agreement for the last three years. Apart from Kiwi brand GHPL was also selling Ambi Pur and Brylcreem brands of Sara Lee in India through a licensing agreement. It may be noted that termination of the agreement is not likely to have a huge impact on GCPL as Sara Lee brands were not a significant contributor to the overall revenues.
Telecom stocks are trading firm with Idea Cellular Ltd and Tata Teleservices (Maharashtra) leading the gains. DoT is likely to issue 18 more show cause notices to telecom operators for not meeting their roll out obligations. It may be noted that earlier this month DoT had already issued show cause notices to Idea Cellular and Etilasat DB for not meeting out their roll out obligations. Etilasat DB had received a notice for cancellation of its license in the circles of Mumbai and Delhi while Idea received the cancellation notice for the Punjab circle. As per regulations, a telecom operator is required to start services in 10% of the town in a circle within a year of receiving the spectrum. The move from DoT came in the light of TRAI's recommendation to cancel the licenses of the operators who have failed to meet the roll out obligations. Telecom operators who have failed to meet the roll obligations include Loop Telecom, Sistema, Uninor, Aircel and Etilasat DB.