Indian equity markets continued to trade in the green after opening strong earlier today. Barring realty and capital goods, all sectoral indices witnessed buying interest.
The BSE-Sensex is trading higher by 117 points and NSE-Nifty is trading up by 31 points. BSE Mid Cap and BSE Small Cap indices are trading higher by 0.8% and 0.9% respectively. The rupee is trading at 55.73 to the US dollar.
Food stocks are trading strong led by Wadala Commodities and United Spirits. According to a leading daily, an Australian court has upheld the Australian government's rule for uniform and plain packaging of cigarettes. The court stated that the cigarette packs must be less attractive and bear graphic health warnings. The Australian high court rejected a challenge by tobacco companies who argued the value of their trademarks will be destroyed if they are no longer able to display their logos on packs of cigarettes. Thus, December onwards cigarettes will be available in uniform package design in Australia. The government hopes that this will make smoking as unglamorous as possible and has urged other countries too to adopt such rules. Taking cue from this, India may follow suit which could pose trouble to cigarette manufacturers like ITC. The stock of ITC is trading lower at present.
Capital goods stocks are trading mixed with gains led by Opto Circuits and Crompton Greaves. However, Larsen & Toubro (L&T) and Elgi Equipments are witnessing selling pressure. As per a leading daily, L&T may buy entire stake of US based Flowserve Corp. in their 50:50 joint venture (JV) Audco India Limited. L&T makes valves under this joint venture and valves are the second biggest revenue generator for L&T after switchgears. At present, L&T gets 60% of its valves from Audco India.
The engineering company is reviewing its other partnerships too and wants to have a majority stake in joint ventures in future. L&T is looking at exiting from L&T Komatsu Limited. It also wants to disassociate from the Swedish truck company, Scania AB.