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Banking stocks weigh down markets
Fri, 26 Jun 11:30 am

After opening the day in red, the Indian stock market has observed marginal selling pressure. Selling pressure is seen in Banking sector and buying interest is seen in Information Technology (IT) sector.

The BSE-Sensex is trading down by 91 points (0.33%) and the NSE-Nifty is trading down by 22 points (0.26%). The S&P BSE Midcap index is trading up by 6 points (0.06%), while the S&P BSE Smallcap index is trading up by 44 points (0.39%). The rupee is trading at 63.61 to the US dollar. Gold and Silver are trading at Rs 26,495 per 10 grams & Rs 36,070 per kilogram respectively.

Stocks in FMCG sector are trading on a positive note with Emami Ltd and Colgate leading the winners. Nestle India Ltd is evaluating different snacks that can take the place of Maggi noodles which are banned in India earlier this month. The ban was imposed due to excessive lead content found in the product and mislabeling with regard to monosodium glutamate (MSG) content. Maggi has a 75% market share in the noodle segment. The Food Safety and Standards Authority (FSSAI) has accused Nestle of failing to comply with the food safety law and said that the tests have found the instant noodles to be 'unsafe and hazardous'. Nestle in order to get the product back on the shelves as soon as possible has challenged the order in the Bombay High Court with the hearing to resume on June 30. The company is evaluating various options such as re-launching Maggi in a new format or launching similar ready to eat or ready to cook instant snack. Nestle is trading up by 1.5%.

Stocks in Banking sector are trading on a negative note with Yes Bank and Oriental Bank of Commerce (OBC) leading the losers. India's largest mortgage lender, Housing Development Finance Corporation (HDFC) has taken approval of the central bank to raise Rs 32 bn through external commercial borrowing (ECB) route. The company is also planning to raise Rs 50 bn simultaneously by secured redeemable non-convertible debentures and warrants. The lender will seek its shareholder's approval for this fund raising plan at the annual general meeting (AGM) later this month. HDFC is trading down by 2.3%.

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