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Indices down on weak global cues
Wed, 25 May 11:30 am

The Indian stock market indices have been trading in the negative territory as selling pressure intensified across index heavyweights over the last two hours of trade. Stocks across sectors are trading weak except consumer durables, healthcare and PSU stocks.

The BSE-Sensex is down by 100 points while NSE-Nifty is trading 30 points below previous closing. BSE Midcap is down by 0.3% and BSE Small cap is trading flat. The rupee is trading at 45.35 to the US dollar.

Banking stocks are trading mixed Bank of India and Canara Bank leading the gains while Development Credit Bank and Karur Vysya bank are on the losing end. As per a leading financial daily, Punjab National Bank (PNB) is looking to buying a stake in the US insurer Metlife India. The staterun bank is in talks to pick up 33% stake in the insurer. The discussion also involves Jammu and Kashmir bank which owns 13% of the insurer. PNB may buy out stakes of J&K Bank and Shapoorji Pallonji & Co. As per the management of Met Life, PNB has shortlisted three companies and Metlife is one of them. However, they said that discussions have not yet begun. As per PNB, financial valuation process is on and they will take the final decision based on that. The deal if happens may help boost the fee income for the PSU bank. For Metlife, it will provide the second-best financial distribution platform in the country.

Consumer goods stocks are trading mixed with Dabur and Gillette India trading firm while Marico and Hindustan Unilever Limited are trading weak. As per a leading financial daily, Hindustan Unilever Limited (HUL) is planning to increase its rural distribution coverage. For this the company has initiated discussions with telecom firms, banks and financial services companies. As per reports the joint distribution model would cover India's 638,000 villages with about 775 m residents. This would be supported by HUL's Shakti initiative. As per the blueprint of the project, the company has tied up with State Bank of India (SBI) in Maharashtra and Karnataka to act as customer service provider of the bank. They project Shakti volunteers will help in opening accounts and distributing insurance and mutual funds products on behalf of the bank. If this project is successful, HUL plans to roll it out nationwide over the next 12 months. However, it is not clear whether the company would form separate rural distribution joint ventures as a business model or sign it would be on the basis of revenue-sharing.

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