Indian indices pared some of their gains on profit booking in heavy weights over the previous two hours of trade. Stocks from consumer durable and metal space are seeing maximum buying interest while stocks from the power and PSU space are seeing the minimum buying interest.
The BSE-Sensex is trading up by 141 points while NSE-Nifty is trading 46 points above the dotted line. BSE-Midcap and BSE-Smallcap indices are both up by 1%. The rupee is trading at 45.87 to the US dollar.
FMCG stocks are trading mixed with Godrej Consumer and HUL trading firm while Colgate and Dabur are trading weak. As per a leading financial daily, FMCG companies are taking price increases or reducing pack sizes to offset the increase in raw material costs. HUL has increased the price of Rin and Lifebuoy soaps in the last few days while P&G has increased the price of its Tide detergent. On the other hand, Parle has reduced its pack size. Other FMCG players like Marico and Godrej are currently working on their pricing strategy. While the price hikes are judicious, and depends on brands, the price hikes have become necessary as FMCG companies look to protect their margins.
Realty stocks are trading up lead by Phoenix Mills. As per a report of FICCI and Ernst and Young, India is ranked as the fifth most attractive destination for future real estate investments. While the country scores well on the country economy development and real estate market indices, it is ranked low in the regulatory index. This is because there is no single clearance system for approval of investment in real estate sector. Furthermore, the approval system is not time-bound. However, India has the potential to make it to the top of the list if the government allows entry of real estate investment trust (REIT) and real estate mutual funds (REMF). While REITs and REMFs have contributed significantly to real estate finance globally, in India this source of funding has not been successful as a result of policy issues and lack of clarification from the government on such funding sources. It is believed that there is a US$ 200 bn private equity fund waiting to be invested globally in the real estate sector. India can benefit from this if it makes regulatory changes to simplify the investment procedures.