Indian share markets pared initial gains and slipped below the dotted line in the post-noon trading session. Majority of the sectoral indices are trading negative with FMCG , metal and realty stocks being the major losers. Only IT and banking stocks are trading in the green.
FMCG stocks are trading mixed with Godrej Consumer and Jyothy Consumer being among the biggest gainers. However, Marico and Hindustan Unilever (HUL) are among the leading losers. As per a leading financial daily, FMCG companies are resorting to price cuts, discounts and promotions to pull out of demand slowdown as consumers cut back on their disposable spends. Companies like Hindustan Unilever , ITC, Procter & Gamble, Cadbury and Heinz have announced discounts ranging between 10%-70% on premium products in the past two weeks. HUL has reduced the price of its premium soaps Dove and Pears by Rs 5. US food-major Heinz is offering Rs 20 off on Complan milk drink. Cadbury has slashed Rs 100 on 200-gm bars of its chocolate brand Toblerone whereas Heinz has reduced the price of its Complan milk drink by Rs 20. Even popular brands such as Godrej Consumer Products' Godrej No.1 and HUL's Lux have been discounted by 5%-10%. After raising prices in the past year to maintain sales momentum, slowdown in offtake is compelling companies to go in the reverse gear.
Most of the Indian pharma stocks are trading mixed with Lupin Ltd and Elder Pharma being the leading gainers, while Ipca Laboratories and Torrent Pharma are the top losers. Dr Reddy's has announced that the company plans to relocate its North American headquarters and establish R&D centre in Princeton, New Jersey. Dr Reddy's has entered into lease contract with the National business parks on the said locations. The new setup will employ 300 plus people, as the company expects growth in its US business for the upcoming period. The R&D facility will also employ approx. 35 scientists, chemists and support personal. Both the ventures are expected to be completed in 2013. Reportedly, as per GV Prasad - chairman and CEO of the company, the relocation will help the company tap the local talent which will help in growth of the US business. Apart from this, the establishment of the R&D centre along with other centres establishes the company's presence within some leading R&D centres globally. The stock of Dr Reddy was trading up by 0.2%.