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Indian Indices Open Weak
Fri, 13 May 09:30 am

Major Asian stock markets have opened the day on a negative note. Stock markets in Taiwan and Japan are trading lower by 1.2% and 1% respectively. Benchmark indices in Europe and US ended their previous session on a disappointing note. The rupee is trading at 66.59 per US$.

Indian stock markets have opened the day on a negative note. The BSE Sensex is trading lower by 107 points (down 0.4%) and NSE Nifty is trading lower by 40 points (down 0.5%). Both, BSE Mid Cap and BSE Small Cap are trading higher by 0.2% and 0.02% respectively.

Major sectoral indices have opened the day in red with stocks from telecommunication and metal sectors witnessing selling pressure.

Nestle India Ltd reported its results for the quarter ended March 2016. The net sales declined by 8.4% YoY to Rs 22.9 billion during the quarter.

The decline was mainly on account of Maggi Noodles. Inspite of being back on the shop shelves for six months now, Maggi hasn't quite recouped its lost market share. The food regulator had banned the noodle brand after some samples were found to contain monosodium glutamate and excess lead.

Reportedly, the market share of Maggi noodles increased from 42% in December quarter to 48% during the March quarter. However, that's still far below the 80.2% market share it commanded in the quarter ended March 2015. Further, increasing competition from ITCs Yippee noodles and CG Foods Wai Wai noodles has also eaten into the market share of Maggi.

Having said that, the company is making efforts to reduce the dependence on the Maggi noodles. The company recently launched Kitkat duo chocolate, Nestle a+Grekyo and Nescafe Sunrise Insta-Filter coffee. Further, the company is looking to increase penetration for all its business including milk and nutrition, chocolate and confectionary, and coffee and beverages.

The net profits declined by 19.1% YoY to Rs 2.6 billion during the quarter. Market share of Maggi coupled with traction from the newly launched products will be the key things to watch out for the company going forward. The stock is trading down by

In another news update, India's factory output barely grew in March. The Index of Industrial Production (IIP) rose 0.1% in the month of March, against a 2% increase in February.

The weak growth in factory output was on account of a 0.1% contraction in mining and a 1.2% decline in manufacturing output in March. However, the electricity generation grew by 11.3%. Capital goods production, considered to be one of the key measure of investment activity in India contracted sharply by 15.4% YoY in the month of March.

While IIP data has tended to be somewhat volatile in the past, what these numbers definitely point towards is the fact that the economy hardly seems to be growing at the kind of pace that the revised methodology of GDP calculation portrays.

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Mar 16, 2018 (Close)