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Markets recover but still in red
Wed, 8 Jun 11:30 am

Indian stock market indices have been trading weak over the last two hours of trade on selling witnessed in index heavyweights. Oil and gas and technology stocks are the top losers while FMCG and capital goods are trading firm.

The BSE-Sensex is down by 22 points while NSE-Nifty is trading 9 points below previous closing. BSE Midcap and BSE Small cap indices are up by 0.5% and 0.6% respectively. The rupee is trading at 44.60 to the US dollar.

Power stocks are trading in the green led by Coal India and NTPC. As per a leading financial daily, Reliance Power and Lanco Infratech are all set to receive coal supply for their newly commissioned projects. The coal will be supplied to these power projects that have a combined capacity of 12,200 megawatt. As per a power ministry official, the projects to be commissioned in first quarter of 2011 would only get 40% of assured supply. However, the older plants would be entitled to receive 70-78% of committed amount. It may be noted that thermal power projects are facing shortage of fuel supply. The industry requires 95 m tonnes coal but only 41 m tonnes are available.

Foods and tobacco stocks are trading firm led by Tata Global Beverage and ITC. As per a leading financial daily, ITC has tied up with major companies like Maruti Suzuki, Nokia and State Bank India (SBI) to extend its rural footprint. ITC plans to add more products from these companies to its rural distribution channels. Presently, ITC's rural distribution channel includes 6,500 e-Choupals which cover 50,000 villages. As per a company spokesperson, ITC's rural focus is to add more products to its distribution channels rather than opening new outlets. This would help increase the consumer engagement on the back of new brands. This in turn will help ITC leverage its Choupal Haats business model. Consumer would be able to access information and awareness on various products, services, schemes available to them, trends and opportunities at the Choupal Haats.

It may be noted that ITC introduced e-Choupal Version 3.0 or Choupal Haats a few months back. The strategy behind this new version of e-Choupal is to insulate the existing e-Choupal model from risks of reversal in government's agri-reforms by helping the company discover new anchor businesses.

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