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Banks lead the rally
Wed, 7 Sep 11:30 am

Indian stock market indices traded in the positive during the previous two hours of trade led by buying witnessed in index heavyweights. All sectoral indices are trading in the green except for FMCG and auto stocks.

The BSE-Sensex is up by 143 points and NSE-Nifty is up by 50 points. BSE Mid Cap and BSE Small Cap indices are also up by 1.0% and 1.2% respectively. The rupee is trading at 46.03 to the US dollar.

Retailing stocks are trading in the green led by Koutons Retail and Zodiac Clothing. As per a leading financial daily, branded jewellery retailers are now venturing into the rural markets. This is because of the changing taste and preferences of the rural consumers. They are now more open to contemporary designs and styles. As per World Gold Council, rural and semi-urban markets make up 60% of the country's Rs 700 bn gold jewellery market.

Titan's Tanishq has launched a separate brand "GoldPlus" aimed specifically at semi-urban and rural areas. Shree Ganesh Jewellery plans to open 250 outlets mainly in Tier II and Tier III cities such as Lucknow, Jodhpur and Kochi to cater to the growing demand there. Almost 2/3 rd of all new jewellery outlets being opened by retailers will be in small towns.

Telecom stocks are trading firm. Reliance Communication and Tata Communication are the biggest gainers. According to a leading financial daily, mobile tariffs are set to go up further due to rising costs. The telecom operators have to service the rural customers as well who do not use any value added services thereby resulting in loss of revenue and higher operating costs overall. The rural customers use phones only for voice calls and text messages.

It may be noted that Indian mobile users have been enjoying the lowest tariffs in the world. The telecom companies thus have been reeling under the burden of low tariffs, high competition and high debt levels as a result of newly launched 3G (Third Generation) and broadband wireless access services. In such a scenario, the management of telecom companies feel that hike in tariffs is inevitable going forward.

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