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Mid and small caps have a better day
Mon, 21 Jul Closing

The Indian equity markets continued their downward trend during the latter half of the day, but still managed to close the day on a positive note. While the BSE Sensex today closed higher by 74 points, the NSE-Nifty closed higher by 20 points. Midcaps and Smallcaps had a better day. Both the BSE Mid Cap and BSE Small Cap indices closed the day higher, recording increases of 0.5% and 0.80 % respectively. FMCG and Energy stocks were the biggest gainers today.

As regards global markets, Asian indices closed on a mixed note today, with the Shanghai markets amongst the losers and Singapore amongst the gainers. The rupee was trading at Rs 60.18 to the dollar at the time of writing.

FMCG stocks, which ended the day on a relatively stronger note, were led by HUL and Marico. As per a leading business daily, the packaged foods business is facing strong competition from a new and fast growing source - home delivered food. Estimates peg the value of home deliveries in the orgarnised part of the food services market to have crossed Rs 10 bn. This has meant that consumers looking for convenient options to satisfy their hunger having been quick to reach out to this alternative. And thus packaged foods of the ready to eat and instant cooking varieties have been losing out.

Auto stocks ended the day on a mixed note. While Ashok Leyland and Bajaj Auto ended the day in the red Force Motors and Tube Investments posted healthy gains. Leading two wheeler player, Bajaj Auto is witnessing competitive pressures and loss of market share in the sub 150 cc segment where it has strong presence via pulsar and discover brands. Notably, the problem area has been discover which has strong presence in the 100cc and 125cc segment. The reason company's domestic share has been declining is because competition is intensifying with players like Honda Motorcyle, Scooters India and Hero MotoCorp going on the aggressive. In FY14, Bajaj Auto's two wheeler volumes declined by almost 15% when the entire industry grew at a modest pace of 4% odd. In order to regain lost volumes and market share the company has decided to launch a new discover in the 150cc segment. It would be interesting to see if Bajaj Auto is indeed able to revive its sagging volumes considering that competition is getting stiffer day by day in the two wheeler space.

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