Major Asian stock markets have opened the day on a weak note with stock markets in Japan (down 1.3%), Hong Kong (down 1%) and Taiwan (down 0.8%) leading the losses in the region. However, the markets in China (up 0.4%) are trading firm. The Indian share market indices have opened the day on a weak note. Stocks in the metal, auto and realty space are leading the pack of losers.
The Sensex today is down by around 121 points (0.7%), while the NSE-Nifty is down by around 46 points (0.9%). Mid and small cap stocks are also trading in the red with the BSE Mid Cap and BSE Small Cap indices down by around 0.6% and 0.3% respectively. The rupee is trading at Rs 56.08 to the US dollar.
Cement stocks have opened the day on a weak note with Heidelberg Cement, Prism Cement and Chettinad Cement leading the losses. South India based cement player Madras Cements has announced its financial results for the quarter ended June 2012 (1QFY13). Net sales for the quarter stood at Rs 9,892.8 m, higher by 29.5% YoY than the corresponding quarter of the previous financial year (1QFY12). The growth was driven by both healthy growth in volumes and better cement realisations. Operating margins contracted from 32% in 1QFY12 to 31% in 1QFY13 on account of significant increase in logistics expenses. Net profits for the quarter stood at Rs 1,230.1 m, witnessing a rise of 25.1% YoY. Net margins declined by 50 basis points (0.5%) from 12.9% in 1QFY12 to 12.4% in 1QFY13.
Food stocks have opened the day on a mixed note with Nestle and ITC Ltd trading in the red. However, Tata Global Beverages and GlaxoSmithKline Consumer Healthcare are trading firm. As per a leading financial leading, Swiss food major Nestle is offering aggressive discounts and incentives to retailers on its flagship product Maggi instant noodles. It is believed that Nestle is offering aggressive discounts in order to the guard its market share against rising competition from aggressive new entrants such as ITC's Sunfeast Yippee, GlaxoSmithKline's Horlicks Foodles and Hindustan Unilever's Knorr Soupy Noodles. Analysts opine that this is the first time in a decade that the company is offering such aggressive discounts. For close to three decades, Nestle's Maggi has dominated the instant noodles market in India. But in recent times, it has been losing market share to competitors such as ITC's Sunfeast Yippee. While two years ago, Nestle commanded 90% market share, the same has slipped down to 80%, as per Nielsen data. The size of the instant noodles market is estimated to be around Rs 13 bn.