Just as it appeared that indices in the Indian stock markets will close the week on a positive note, a strong wave of selling dashed all hopes and led the markets to close deep in the negative. Thus, while BSE-Sensex
edged lower by more than 340 points (down 2%), fall on the NSE-Nifty came in the region of 90 points. BSE Mid Cap and BSE Small Cap indices were not spared either as both of them shed in the region of 2% each. Only four of the Sensex stocks managed to close the day in the positive.
Mood in other parts of Asia though remained quite buoyant as India appeared to be the only continental market to end in the red. Europe too is trading mostly positive currently. The rupee was trading at Rs 52.74 to the dollar at the time of writing.
With today's fall, markets are down 4% for the week. As most of the other global indices traded strong today and with Reserve Bank Of India also taking a pause in its hawkish journey, the expectation was of a positive closing. And the script did unfold as per the plan. However, things started going awry towards the fag end as a strong wave of selling activity took the markets into reverse gear and did not stop until they had gone deep into the negative. To make matters worse, there does not appear to be any hope for the situation to improve in the weeks ahead as both local as well as international scenario continues to remain gloomy.
With the fall in the rupee of the extent of 20% in the last few months, consumer product companies that were so far relying on imports, have been forced to rethink their move. A leading business daily reports that these companies are increasingly turning to insourcing or in-house production, more so for premium categories as besides cost, a need for greater control over quality also seems to be on the rise. On the latter, research by leading consulting firm BCG, has pegged annual consumer spend to go up more than three fold in the next decade. Since quite a bit of this will come from consumer uptrading, control over quality by having a close watch on the manufacturing process will emerge as the key step. Most of the consumer product majors closed lower today.