Indian equity markets languished in the red for the larger part of the trading session today. While the indices began the day's proceedings on a positive note, selling pressure intensified across index heavyweights in the ensuing hours pushing them into the red. There was no respite in the final trading hour as well and the indices closed well below the dotted line. While the Sensex today closed lower by 73 points, the NSE-Nifty today closed lower by 22 points. The BSE Mid Cap and the BSE Small Cap, however, bucked the trend and closed higher by 1% and 0.5% respectively. Losses were largely seen in IT and oil & gas stocks.
As regards global markets, Asian indices closed mixed today while European indices have opened in the red. The rupee was trading at Rs 54.76 to the dollar at the time of writing.
Food stocks closed mixed today. While Britannia and VST Industries found favour, ITC and Nestle closed in the red. As per a leading business daily, FMCG major ITC is in the process of expanding operations by commissioning fresh capacity to address the growing business opportunity in the packaging segment. Demand for packaging is expected to be driven by the need for differentiated products as well as rising demand from the rural segment. ITC intends to leverage its multiple packaging platforms to expand in both the domestic and export markets. The company has been investing in contemporary technologies in both flexible and paperboard packaging at its Haridwar and Chennai facilities. It must be noted that the packaging sector in India has been growing at a compounded annual growth rate of around 16%. It is also one of the fastest growing packaging markets in the world. Hence, this is an opportunity which ITC intends to capitalise on going forward.
As per a leading business daily, the government expects the Indian economy to grow between 5.7-5.9% in the current fiscal. This is lower than 7.6% projected in the Economic Survey. This estimate has come out in the Mid-Year Economic Review tabled in Parliament. But for this to happen, the GDP would have to grow by atleast 6% in the second half of FY13. The scenario has not been too enthusing during the first half with growth slowing to around 5.5% during both the quarters. Inflation not having come down to the desired levels, the Reserve Bank of India (RBI) has been reluctant to cut interest rates. Thus, a combination of firm interest rates and high fuel prices has also impacted the profitability of Indian companies. The government is also burdened with a rising fiscal deficit. Unless it comes out with a meaningful long term solution to cut down deficit and do away with bottlenecks on the supply side, inflation would continue to pose a problem.