Heavy selling led the Indian stock markets to slip in to the negative territory during the previous two hours of trade. Selling pressure is seen most in the mid and small cap stocks. Among the sectoral indices, realty and capital goods stocks are leading the pack of losers, whereas FMCG and software stocks are trading on a firm note.
The BSE-Sensex is trading down by 50 points and the NSE-Nifty is trading down by 17 points. The BSE Mid Cap index is trading lower 2% and the BSE Small Cap index is trading lower 2.6% today. The rupee is trading at 61.18 to the US dollar.
Most energy stocks are trading on a weak note led by MRPL and Chennai Petroleum, while few stocks like HPCL and BPCL are trading higher. As per a leading business daily, Indian Oil Corporation (IOC) plans to invest Rs 87 bn to expand Mathura refinery in the state of Uttar Pradesh. This will augment the oil refinery capacity to 11 lakh metric tonnes from the current capacity of 8 lakh metric tonnes. This move will lead to speedy development of Mathura-Agra region. As per the state government the project will also provide employment opportunities to about 10,000 individuals. The company is expected to issue a detailed proposal regarding the project within a week. The stock of IOC is trading higher by 1% at the time of writing.
Food stocks are trading on a mixed note today. Losers are being led by Wadala Commodities and Ruchi Soya, whereas Nestle is trading firm. As per a leading business daily, Britannia is expected to sell one of its subsidiaries as its performance with respect to the core business of the company has been a laggard. As per the company Chairman Nusli Wadia it may not be invested for long in it's wholly owned subsidiary, Daily Bread Gourmet Food. The subsidiary has 29 stores in Bangalore that sells bakery products and reported revenue of Rs 200 m and a loss of Rs 20 m in FY14. Britannia acquired majority stake of 51% in Daily Bread in 2006 and remaining stake in the next 2 years. However, the business has not been providing promising performance. As such, Britannia has made impairment provision of Rs 200 m in the value of investment in the subsidiary which was earlier valued at Rs 270 m. The company management wants to become the largest biscuit maker in India within next three years by overtaking the market leader, Parle Products. The company lags the market leader by about 3 percentage points. It plans to invest Rs 1.5 to 2 bn over next 2 years to expand its production capacity. Britannia is trading lower by 2% today.