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Weak opening for Indian stock markets
Fri, 11 Nov 09:30 am

Asian stock markets have opened the day on a firm note. Stock markets in South Korea (up 1.9%), Hong Kong (up 0.9%), Singapore (up 0.3%), and China (up 0.2%) are in the green while Japan (down 0.1%) is in the red. The Indian stock market have opened the day on a weak note. Stocks in the Metal and Realty space are leading the losses. However, Healthcare stocks are in the green.

The BSE-Sensex is trading down by 132 points (0.7%) and the NSE-Nifty is down by around 36 points (0.7%). BSE Midcap and BSE Small cap stocks are trading in the red, with the BSE Mid Cap and BSE Small Cap indices down by 0.4% and 0.2% respectively. The rupee is trading at 50.34 to the US dollar.

Pharma stocks have opened the day on a firm note with GSK Pharma and Novartis leading the gains while Pfizer and Wyeth are in the red. GSK Pharma has announced its third quarter results for the calendar year 2012 (3QCY12). The company has not performed well either on sales or on profit front. The net sales grew merely by 4.3% YoY based on poor performance in therapies like anti-infective. The operating margins (EBITDA) decreased by 680 bps (6.8%) to 29.8% due to higher raw materials costs and other expenditure. This was on account of overheads related to the field force expansion. Correspondingly, the net profits de-grew by 7.6% YoY during the quarter.

FMCG stocks have opened the day on a subdued note. Stocks of Godrej Consumer Products and United Breweries are leading the losses. However, Dabur India and Marico Industries have opened the day in the green. The financial year 2010-2011 (FY11) was a year of robust performance for the FMCG sector. Most companies witnessed a healthy growth in their top lines. As a result, the companies have increased the compensation for the senior managements. As reported by a leading daily, the compensation for the CEO's of the largest companies Hindustan Unilever Ltd (HUL) and Procter & Gamble (P&G), increased substantially in FY11. The pay for the CEO of HUL was up by nearly 150% and that of P&G was up by 70%. However, it is important to be noted that despite witnessing healthy growth rates on the top line levels, most FMCG companies saw their margins come under pressure during FY11. This was mainly on account of higher commodity prices during the year.

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