The Indian markets opened below the breakeven mark, and have not managed to breach the dotted line although they have managed to move northwards since then. Asia is currently trading in the red with Indonesia (down 1.2%) leading the pack of losers. The US markets closed higher by 0.3% yesterday.
Currently, in India, heavyweights from the BSE-Sensex are trading a mixed bag with metal and telecom stocks leading the pack of gainers. However banking and auto majors are in the red. The BSE-Sensex is trading lower by 14 points, while the NSE-Nifty is down by 10 points. However, buying interest is being witnessed among mid and small-cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.1% and 0.3% respectively. The rupee is trading at 46.29 to the US dollar.
PSU banks have opened the day on a mixed note. Gainers here include PNB and Bank of India, while UCO Bank and Indian Bank are trading weak. As per a leading business daily, IDBI Bank has identified a potential merger target. This comes on the heels of Canara Bank and Union Bank of India also looking to increase their size through the inorganic route. It may be noted that the government has specifically mentioned that IDBI Bank will not be merged with another bank. This is despite the fact that it is smaller than many other public sector banks. In our opinion, while IDBI Bank will not be acquired, it could target smaller banks once it has sufficient capital and the banking sector is ready for consolidation.
Food stocks have opened the day on a mixed note. While Nestle is trading in the green, ITC and Britannia are trading weak. As per a leading business daily, ITC is open to demerger of its business verticals into separate entities as they grow larger. However, it will do so keeping in mind the synergies between the various verticals. The company has a presence in a wide variety of sectors such as cigarette, hotel, paper, agriculture and FMCG. ITC also plans to continue investing in the FMCG business with the aim of becoming the leader in the space. It may be noted that the company now has more than 150 distinct food products under 6 brands and has been displaying brisk growth. Given its sizeable cash reserves, the company does not intend to bring in any fresh capital.