The EGoM meeting on fuel will be closely watched by investors
The local market is likely to open on a cautious note on mixed cues from the global arena. The Empowered Group of Ministers (EGoM) on fuel is likely to meet today to consider a hike in diesel and domestic LPG prices, as well as a cut in duty rates to combat the high cost of crude oil. The surprise development, in the backdrop of the fall in crude prices on Thursday, will give the market some direction, later in the day.
On the global front, markets in the US closed mixed, recovering from the lows of the day, on dismal economic news and lower oil prices as the International Energy Agency (IEA) planned to release more crude from its emergency stockpiles. On the other hand, markets in Asia were trading mostly on speculations that lower oil prices will help economies in the region. The SGX Nifty was 10 point higher at 5,329 compared to its previous close of 5,319.
The market showed strong resilience yesterday, shrugging off weak global cues, high food inflation data and poor US and Asian market trends, to end with decent gains. Buying in heavyweights also supported the upmove.
Weak global cues saw the domestic market opening lower. The Nifty was down nine points at 5,269 and the Sensex started the day at 17,527, lower by 24 points. Banking, realty, auto and metal stocks were on the sellers' radar in early trade, pushing the indices to their intra-day lows in the first 15 minutes. At the day's low, the Nifty slipped to 5,252 and the Sensex to 17,482.
Select buying in stocks like Reliance Industries, ITC and Infosys helped the market overcome initial hiccups and trade in the green. The gains improved as the session progressed and investors shrugged off the spike in food inflation data. The market touched its intra-day high in noon trade, with the Nifty at 5,331, up 53 points and the Sensex surging 204 points to 17,755. Then a weak opening in the European markets dampened sentiments a little and the indices pared some gains. The market traded sideways thereafter, closing slightly below the highs of the day. The Nifty closed at 5,320, a gain of 41 points, and the Sensex advanced finished at 17,727, a good 177 points up.
After six trading sessions, the Nifty has managed a higher high and a higher close. The high of the day was 5,331. The intra-day high was the first resistance we had mentioned in Wednesday's closing report. The next resistance is at 5,355.
US markets, which were sharply down on weak economic data, closed off the lows of the day. The IEA’s decision to release more oil from its strategic stockpiles also hurt investor sentiment. Initial jobless claims rose 9,000 in the week ended 18th June 18 to 429,000, more than analysts’ forecast. The Bloomberg Consumer Comfort Index dropped to minus 44.9 last week from minus 44. New home sales fell 2.1% in May to a 319,000 annual rate, figures from the Commerce Department showed.
Crude oil plunged as low as $89.69 a barrel on the New York Mercantile Exchange before ending down 4.6% at $91.02. Brent crude on the ICE futures exchange saw even deeper losses, dropping 6.1% to $107.26. The IEA move came a day after Fed chairman Ben Bernanke indicated he had no plans to begin a new round of easing.
In Europe, while the European Union and the IMF have endorsed Greece’s 78 billion-euro ($111 billion) austerity package, the country’s lawmakers must support the move in a vote next week, a condition necessary for receiving new loans.
The Dow declined 59.67 points (0.49%) to settle at 12,050. The S&P 500 shed 3.64 points (0.28%) to 1,283.50. On the other hand, the Nasdaq Composite rose 17.56 points (0.66%) to close at 2,686.75.
Markets in Asia were mostly higher on easing of debt concerns in Greece and falling oil prices. Crude ended lower yesterday after the IEA announced that members would release 60 million barrels of oil from emergency supplies to replace lost Libyan oil exports.
Meanwhile, Chinese premier Wen Jiabao has declared victory over domestic inflation, saying that the government has successfully reined in price pressures. China’s leaders will meet early next month to decide the direction for economic policy for the second half of the year.
The Shanghai Composite gained 0.39%, the Hang Seng surged 1.06%, the Jakarta Composite and the KLSE Composite were up 0.01% each, the Nikkei 225 rose 0.28%, the Straits Times advanced 0.14% and the Seoul Composite climbed 0.80%. On the other hand, the Taiwan Weighted lost 0.47% in early trade.
Back home, in the long-running tussle between the National Stock Exchange (NSE) and its younger rival MCX-SX, the Competition Commission of India (CCI) is believed to have penalised NSE for abusing its dominant market position.
As a penalty, NSE has been asked to pay 5% of its three-year average annual turnover and also ‘cease and desist’ of unfair trade practices in the currency derivative trading, sources said.
P&G is the latest entrant in the Rs300-crore men's fairness products market that has recorded faster growth than that for women
Procter & Gamble's "Olay" is the latest brand to venture into the curious men's fairness cream arena. While the company is doing its best to make its mark, some market observers believe that the small market has already seen too many brands.
"Men's fairness creams constitute just a tenth of the segment. While it is an area which has potential, there are already a lot of options. The launch of another brand may not create any breakthroughs," commented an analyst. He compared the men's fairness segment with the deodorant market, which has seen many launches after the success of Axe, but have fragmented the sector, eating into each other's revenues.
P&G's product has found its way to India after China. The company also owns Gillette, which is a men's only brand, and it plans to add more products to its portfolio. Olay Men's Solutions will see high-end marketing, as the products are in the premium category.
Emami was the first to target the metrosexual with "Fair and Handsome" five years ago. As the brand took off, there were back-to-back launches. Hindustan Unilever (HUL) went to the market with "Fair and Lovely Menz Active", then there was "Nivea for Men", "Garnier Powerlight for Men" and "Vaseline Men". All of them have had significant sales, but Emami has stayed the leader.
Emami reported sales of Rs125 crore till December 2010, proof of its pioneering position and strength as an exclusively men's brand, unlike the others who derive their strength from their fairness products for women. "The brand is looking for a significant value growth on its present base (26%- MAT on December 2010)," says an Emami spokesperson.
The men's fairness cream market is estimated to be valued at Rs300 crore, but has seen a robust growth for most brands at 25%-30%. By contrast, the huge Rs3,000 crore women's fairness cream market is growing at 10%-15% annually.
The men's fairness sector is yet to realise its full potential, as many men still use women's fairness creams. Emami says that there is a huge demographic to be tapped, with an estimated six to seven times more males using women's fairness cream than males using men's only fairness creams.
"This is a lucrative area, but it really depends on the brand placement," said an advertising company spokesperson. "Each brand is appealing to a section of men and a new brand has to create its own niche to succeed. Pricing, too, becomes important because a majority of the customers go for products which offer value for money."