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Power, metal buck the trend
Wed, 4 Dec Closing

Profit booking during last hour of trade led the Indian markets to slide deeper into the red. The BSE-Sensex ended the day lower by about 150 points or 0.7%, while the NSE-Nifty closed lower by about 40 points or 0.7%. Stocks from the power and metals spaces were amongst the top performers today, while those from the realty and FMCG spaces led the pack of underperformers. BSE Mid Cap and BSE Small Cap closed on a weak note as well with their respective indices down by about 0.7% and 0.1% respectively.

Asian stock markets closed the day on a weak note with Hong Kong and Japan down by about 0.8% and 2.2%, while China ended higher by about 1.3%. The rupee was trading at Rs 62.24 to the dollar at the time of writing.

Stocks of FMCG companies ended the day on a weak note with Godrej Consumer, ITC and Nestle being the top underperformers. Food major, ITC Ltd's Sunfeast brand has emerged as a clear leader in the Rs 46 bn cream biscuit market. As per industry sources, ITC's cream biscuit market share stands at around 25% in value for the year ended 31st October 2013. The market share for Parle Products and Britannia stood at below 20% during the same period. However, a year ago, products of the three companies were at par with respective market shares at 23%. But it seems that Sunfeast has captured the market from Parle and Britannia in the cream biscuits market. Consistent focus on portfolio enhancement through innovations like Sunfeast Dark Fantasy Choco Fills and Choco Meltz and Sunfeast Dream Cream range has enabled the company to edge forward. The new flavors have enriched the Sunfeast consumer franchise. In the highly intense competitive environment particularly in the cream biscuit market, ITC has come out well. With the biscuit market that has undergone drastic change in the last decade, ITC ltd definitely stands ahead of the curve over Britannia Industries and Parle products.

Power stocks ended the day on a firm note led by Adani Power, Tata Power and Power Grid Corporation of India Limited. Private power major, Tata Power stated today that the announcement of the much awaited order relating to the compensatory tariff by power regulator CERC is expected to be announced by the end of the month. As mentioned by the company's management, the central regulator has finished the hearings. Tata Power's stock has been under pressure ever since the Indonesian government decided to sync local coal prices to that of the rates prevailing in the international markets, thereby making its bid to supply power at the bid rate unviable. In fact the project was fully commissioned this year, but has been losing money as costs are higher than the realizations it gets per unit. And since the capacity of this project is substantial to the overall size of the company, it has had an adverse impact on the company's business. The above mentioned news is a result of the company seeking relief on account of adverse impact of the unforeseen, uncontrollable and unprecedented escalation in the imported coal price. Nevertheless, the stock was the best performing one amongst those forming part of the BSE-Sensex.

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Feb 23, 2018 (Close)