The Nifty may witness a minor contraction. However, the trend on the index would remain strong as long as it does not close below any previous day’s low
The market closed in the green for the third day in a row on support from realty, capital goods power and fast moving consumer goods stocks. The Nifty may witness a minor contraction. However, the trend on the index would remain strong as long as it does not close below any previous day’s low. The National Stock Exchange (NSE) recorded a lower volume of 61.69 crore shares and advance-decline ratio of 1050:335.
Earlier, the Indian market opened marginally lower on unsupportive cues from its Asian peers. Most markets in Asia were in the red in morning trade on a fall in China’s official factory PMI for June to 50.1 from 50.8 in the previous month. Concerns of the US Federal Reserve tapering its stimulus also weighed on investors.
The Nifty opened eight points lower at 5,834 and the Sensex resumed trade at 19,352, down 44 points from its previous close. The benchmarks touched their lows in initial trade itself with the Nifty slipping to 5,822 and the Sensex falling to 19,348.
The market soon recovered from the lows and emerged into the positive terrain on support from PSU, power and capital goods stocks. After remaining range-bound till mid-morning trade, the benchmarks gained momentum on all-round buying.
Meanwhile, the HSBC/Markit purchasing managers’ index for the manufacturing industry stood at 50.3 in June, slightly higher than 50.1 in May as new orders declined for the first time in over four years and power cuts and fragile economic conditions weighed on the sector’s performance.
The market continued its upmove in the noon session on support from the European markets which were in the green as the Euro region factory output contracted less-than-expected.
The indices hit their intraday highs towards the end of the trading session as across-the-board buying lifted all but two sectoral indices. The Nifty rose to 5,904 and the Sensex climbed to 19,598 at their respective highs.
The benchmarks closed near the highs of the day on buying in heavyweights. The Nifty gained 57 points (0.97%) to 5,899 and the Sensex climbed 182 points (0.94%) to settle at 19,577.
The broader markets outperformed the Sensex today, as the BSE Mid-cap index climbed 1.81% and the BSE Small-cap index surged 1.95%.
With the exception of the BSE IT index (down 1.60%) and BSE TECk (down 0.44%), all other sectoral gauges settled higher. The top gainers were BSE Realty (up 5.26%); BSE Capital Goods, BSE Power (up 2.77% each); BSE Fast Moving Consumer Goods (up 2.11%) and BSE Metal (up 1.97%).
Out of the 30 stocks on the Sensex, 24 stocks settled higher. The chief gainers were Maruti Suzuki (up 4.37%); Sterlite Industries (up 3.89%); GAIL India (up 3.27%); Larsen & Toubro (up 3.26%) and State Bank of India (up .17%). The main losers were Infosys (down 1.83%); TCS (down 1.76%); ONGC (down 0.55%); Sun Pharmaceutical Industries (down 0.44%) and HDFC Bank (down 0.19%).
The top two A Group gainers on the BSE were—Jaypee Infratech (up 16.98%) and United Breweries (up 14.06%).
The top two A Group losers on the BSE were—Gitanjali Gems (down .99%) and MMTC (down 4.96%).
The top two B Group gainers on the BSE were—Noida Medicare (up 20%) and Objectone Information Systems (up 20%).
The top two B Group losers on the BSE were—Bhartiya International (down 18.64%) and Summit Securities (down 18.46%).
Of the 50 stocks on the Nifty, 40 ended in the in the green. The major gainers were Ranbaxy Laboratories (up 5.19%); Reliance Infrastructure (up 5.10%); DLF (up 4.33%); Sesa Goa (up 3.89%) and Jaiprakash Associates (up 3.73%). The key losers were Infosys (down 2.24%); HCL Technologies (down 1.93%); TCS (down 1.92%); ONGC (down 0.85%) and Sun Pharma (down 0.70%).
Markets in Asia were mixed as the official manufacturing PMI in China expanded at the slowest pace in four months. The Japanese market gained as the quarterly Tankan index for large manufacturers rose to plus four in June, up from minus eight in March.
The Shanghai Composite advanced 0.81%; the Hang Seng surged 1.78%; the KLSE Composite added 0.09% and the Nikkei 225 climbed 1.28%. Among the losers, the Jakarta Composite declined 0.86%; the Straits Times fell 0.30%; the Seoul Composite contracted 0.41% and the Taiwan Weighted settled 0.33% lower.
Back home, foreign institutional investors were net buyers of stocks totalling Rs1,124.31 crore on Friday whereas domestic institutional investors were net sellers of shares amounting to Rs581.28 crore.
Utility vehicles leader Mahindra and Mahindra today announced a nominal 0.5% price hike across all models, expect for the premium sports utility vehicles XUV 500 and the Rexton from its Korean arm, despite falling sales, which dipped nearly 8% in June. The stock gained 1.79% to close at Rs988 on the NSE.
Godrej Properties has bought back HDFC Asset Management Company’s nearly 50% stake each in the realty firm's two projects at Chennai and Chandigarh for an undisclosed amount. The exit was provided as per the buy-out option available under separate agreements with the HDFC Asset Management Company for Godrej Eternia project at Chandigarh and Godrej Palm Grove at Chennai. Godrej Properties rose 0.16% to Rs533.40 on the NSE.
FMCG major ITC plans to set up waste processing units in Bangalore by procuring dry recyclable plastic from households and commercial establishments. The project is a corporate social responsibility (CSR) initiative of the company to help create sustainable livelihoods for rag pickers and municipal waste collectors (paura karmiks). The stock rose 0.51% to settle at Rs326 on the NSE.
Much of our food-related advertising panders to our sugar addiction that results in fuelling our desire to consume even more of sugar. This is the first part of a two-part series
Sweet is a taste that we cherish; we are genetically predisposed like many of our fellow creatures to love sweetness. During pre-history, sweetness was luxury; man consumed sugar through the medium of plucked fruits or occasionally through freshly extracted honey. With the advent of agriculture and later the industrial age, mass production of cane sugar and beet sugar came into being and sugar transitioned from a once luxury to a daily staple. If health is a consequence of interaction between genetics and environment, then sugar is certainly one of the most important variables that defines our gastronomical environment and it certainly has a lot of adverse impact on our health. Many scientists concur that that the deleterious metabolic effects of sugar are due to the fructose moiety of the sugar molecule; the calories provided by the fructose from sucrose triggers visceral obesity and a host of metabolic problems—but more about that later.
Much of our food related advertising is about pandering to our sweet sugar addiction. From biscuits to colas to fruit drinks to ice-creams to chocolates to jams and ketchups—a barrage of advertising blitzkriegs us and our children every day from our television screens, the print media and the internet, influencing our food choices; creating and fueling our desire to consume sugar in the form of liquid and solid calories and leaving in its wake an epidemic of obesity and its associated complications.
Given above is a graphic illustrating the percentage of sugar, gms per 100gms or 100ml in various processed foods available commonly in the Indian market and consumed widely. And if you thought sugar was all about sweetness, think again even a tangy product like Hindustan Unilever’s Kissan tomato ketchup which we consume generously with our savories contains a whopping 26 grams of sugar per 100 grams of ketchup!
Contrast the information portrayed in the above graphic with ICMR’s recommendations for the daily consumption of sugar (intrinsic + extrinsic(added)) for children and adults which we obtained from a query to ICMR under the Right to Information Act, 2005, and which is given below.
SI. NO. Age Group Recommended sugar & jaggery intake (g/day)
1. 1-3 years 30
2. 4-6 years 40
3. 10-12 years 45
4. ≥18 years (Men) 30
5. ≥18 years (NPNL* women) 35
* NPNL - Non pregnant non-lactating
The American Heart Association (AHA) is even more conservative than the ICMR in matters of daily added sugar intake. It recommends the following daily intake levels of sugar for men, women and children (reference. 1, 2). Men should not consume more than 45 grams of added sugar per day; women should not consume more than 25 grams of added sugar per day and in case of children and teenagers:—For preschool children the recommended added sugar intake is around 16.7 g per day, for children from ages 4 to 8 the recommended added sugar intake is 12.5 g per day. For Pre-teen and teenagers the recommended added sugar intake is between 21 and 33 g of sugar per day.
As can be seen, eating even a big bar of Cadbury Silk chocolate (160gms) or half of it is equivalent to consuming 89 gms or 44.5 gms of sugar a day! But is that all we consume? For breakfast and tea, along with our savories we consume, depending upon our whim, tablespoons of ketchup or jam. We eat biscuits, consume ‘refreshing’ soft drinks (colas or fruit juices) during the course of the day and finally the two teaspoons of sugar that might go in to our several cups of coffee or tea through the day! Clearly, we over-consume sugar several times over the ICMR as well as AHA recommended daily intakes for added sugar.
(Dr Arvind Shenoy is an MSc (Organic Chemistry) and PhD in Biochemistry from UDCT, Mumbai. He has 43 years of experience in the analysis, R&D and marketing of foods, organic and inorganic chemicals, plastics, rubber, paper, textiles, waxes, leather, pharmaceuticals, etc. He is the only person from India to have been trained in Belgium, the Netherlands and England in comparative product testing.)
Overall, even as the PMI improved in June, the internal factors (rise in inventory, the fall in domestic orders to sub-50, rise in input costs) are not encouraging, said Nomura in its Asia Insights report
After falling for three consecutive months, India’s manufacturing PMI rose to 50.3 in June from 50.1 in May led by an expansion in external demand even as domestic demand remains sluggish. External demand continues to improve: the new export orders index increased to 54.4 in June from 54 in May. However, the new order index fell to 49.7 (the lowest since March 2009) in June against 50.5 in May, indicating a further deterioration in domestic demand, according to Nomura in its Asia Insights report.
Output continued to contract, but it improved slightly to 49.1 in June from 48.6 in May. Finished goods inventories rose to 51.0 in June from 50.6 in May as producers started restocking inventories in anticipation of better external demand. However with domestic demand weak, the new order/inventory ratio fell to 0.97 in June compared to 1 in May, a sign of further weakness, said Nomura.
The brokerage believes that price pressures are rising. The input price sub-index rose to 55.9 in June from 51.3 in May reflecting a weak currency. The output price index also increased to 50.9 from 49.8 as producers passed some of the higher input costs onto consumers. With input costs rising faster than the output prices, the margin ratio (output/input price index) worsened to 0.91 in June from 0.97 in May.
Overall, even as the PMI improved in June, it has averaged 50.5 in the second quarter of calendar 2013, lower than 53.1 in Q1, due to weak domestic demand, said Nomura. The internals are also weak: the rise in inventory, fall in domestic orders, and the rise in input costs. “The external sector remains India’s Achilles’ heel as a weak currency can further raise imported inflation pressures, force producers to raise output prices to protect their margins, and delay rate cuts despite weak demand, said Nomura in its report.
With financial stability concerns (due to a weak currency) far more important, Nomura expects the Reserve Bank of India (RBI) to keep policy rates on hold at its next meeting on 30th July. Beyond that, its forecasts 50bp cumulative repo rate cuts towards end-2013, but the risk is rising that rate cuts may be further postponed. Nomura remains comfortable with its below-consensus GDP growth forecast of 5.6% y-o-y in FY14 as India’s growth recovery is likely to be very gradual at best.