Heavyweights weigh on the markets

Fri, 15 Apr 09:30 am

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Asian stock markets have opened the day on a negative note as concerns regarding China’s higher inflation numbers dampened the investor sentiments. Markets in Korea (down 0.6%), China (down 0.5%) and Japan (down 0.5%) are leading the losses. However, markets in Indonesia (up 0.1%) are witnessing marginal gains. The Indian stock markets have opened the day on a weak note as well. Heavyweights in the IT and power sector are leading the losers’ pack. However, healthcare and FMCG stocks are witnessing buying interest.

The BSE-Sensex is trading lower by around 112 points (0.6%), while the NSE-Nifty is down by around 24 points (0.4%). Midcap and small cap stocks are trading in the positive however, with the BSE Midcap and BSE Small cap indices up by about 0.03% and 0.2% respectively. The rupee is trading at 44.56 to the US dollar.

FMCG stocks have opened the day on a positive note note. Dabur and Godrej Cons. are the leading gainers. However, the stocks of Marico and Colgate Palmolive are trading in the red. FMCG major Hindustan Unilever Ltd (HUL) is striving to double its topline by 2015. Towards that end, the company is considering various strategies to gain the largest market share in the consumer goods space. Eyeing the opportunity that the summer season presents, HUL re-launched its Lifebuoy talcum powder brand in the prickly heat talc segment. The company has also gone in for brand extensions in Knorr (soup) and Kissan (jam and ketchup), brands that are leaders in their respective categories. In this manner, the company is aiming to fill in the white spaces in its product portfolio.

Power stocks have opened the day on a weak note with GVK Power, NTPC and NHPC witnessing major losses. India’s largest coal producer Coal India would be investing nearly US$ 3 bn in Indonesia. The funds would be utilized for a coking coal mine, setting up a steel plant as well as to set up a seaport at Indonesia's Kalimantan Island. The governor of Kalimantan, Mr. Narang, has stated that Coal India would be completing its feasibility study by June this year, to ascertain the level of coal reserves which it could develop. He also stated that Coal India would be providing the necessary funds for the project as well. Central Kalimantan is estimated to have coal reserves of nearly 4.8 bn tones. Of this nearly 40% is coking coal. However, a big worry in this entire project is the lack of a regulatory framework with regards to land acquisition in Indonesia. This has stalled many a project in the country. Nevertheless, it does appear for now that Coal India would be looking at expanding its horizons beyond the boundaries of India. It would be important to remember that the company had to cut down the coal production targets in recent past.