Indian share markets continued to stagnate in the post-noon trading session. Majority of the sectoral indices are trading in the green led by power and consumer durable stocks. Oil & gas and auto were among the few stocks trading in the red.
Majority of the retailing stocks are trading in the green with Provogue and Titan Company being the major gainers. As per a leading financial daily, the government has brought the monthly instalment schemes offered by jewellery companies under the public deposit scheme. Therefore in conformance with the Companies (Acceptance of deposit) Rules, 2014, jewellers will have to limit the return they offer on the schemes to 12%. Reportedly, returns offered on existing schemes hover at around 17-18%. Moreover, the total amount of deposits that can be mobilized through this scheme has been capped at 25% of the networth. As per All India Gems and Jewellery Trade Federation, the saving schemes of Titan Industries (Tanishq), PC Jewellers and Tribhovandas Bhimji Zaveri will be treated as deposits and hence need to be modified through reduction in the tenure to a year. This development is likely to reduce customer advances and hurt treasury income of jewellery companies. Even customer acquisition process would be rendered difficult at a time when demand continues to be weak. Titan's stock is trading up by 1.5%.
Majority of the engineering stocks are trading in the green led by Crompton Greaves and Sanghvi Movers. As per a leading financial daily, the board of directors of Crompton Greaves has proposed to demerge its consumer products business unit into a separate listed company. According to the board, the demerger will create better growth opportunities for its two large but significantly different businesses namely power, industrial and automation. The division will also allow the two grow independently and create further value for shareholders. Crompton Greaves' stock is trading up by 14.7%.