The Indian markets have started today's session on a strong note. The benchmark indices opened way above the breakeven mark and have managed to hold on to their gains since then. Other key Asian markets are trading in the green with Hong Kong (up 1.7%) leading the pack of gainers. The US markets closed higher by 0.4% yesterday.
Currently in India, heavyweights from the BSE-Sensex are trading in the green with metal, auto and software stocks attracting buyers' interest. The BSE-Sensex is trading higher by around 141 points, while the NSE-Nifty is up by about 43 points. Buying interest is also being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 1.6% each. The rupee is trading at 46.36 to the US dollar.
Steel stocks have opened the day on a positive note. Gainers here include SAIL and Tata Steel. Steel maker SAIL announced its 3QFY10 results yesterday. The company reported a topline growth of 12% YoY during the quarter on account of higher volumes and sales mix. Its operating margin expanded to 26% during 3QFY10 from 13% in 3QFY09 as raw material and staff cost decline by 8% and 4% respectively as a percentage of sales. Other income declined by 27% during the period. The company registered a bottomline growth of 99% YoY during 3QFY10 on account of topline growth and higher operating margins.
FMCG stocks have opened the day on a mixed note. Gainers here include GSK Consumer and Tata Tea. Nestle India is in the red. As per a leading business daily, FMCG majors are changing their strategy for rural markets. Earlier, they used to introduce smaller packs of their flagship brands at lower price points. Now, they are increasingly launching products specifically for rural markets. GSK Consumer has introduced Asha, a 40% cheaper variant of Horlicks, for rural markets only. It also has a slightly different taste. Nestle has also recently launched Maggi Masala-ae-Magic and Maggi Rasile Chow at the price point of Rs 2 and Rs 4. In our view, these moves indicate that FMCG majors are now looking at rural markets as target markets and not as adjuncts of lucrative urban markets. As a result, we see them positioning their brands appropriately. In fact, the purchasing power of rural markets is growing at 3% to 4% per annum. Rural markets now account for half the volume consumption for FMCG companies.