The Nifty hit our initial target of 4,800 today
For the second day today the National Stock Exchange (NSE) traded on a very low volume of 38.64 crore shares. As we mentioned in our yesterday’s closing report that the Nifty has to close strongly above 4,800 for the upmove to continue. But today the index reached this level in opening session itself and after range-bound movement in the morning session it went into the negative. At present the market is in an indecisive zone and is likely to stay sideways.
The market opened flat despite a rebound in infrastructure growth in November and in the absence of any global cues. Wall Street and Europe remained closed on Monday for Christmas holidays, resulting in the Asian pack opening weak this morning. The Nifty opened one point higher at 4,780 and the Sensex began the day at 15,984, up 13 points.
Volatile trade saw the indices slipping into the red in early trade. But select buying lifted the benchmarks into the green a short while later. The buying helped the market hit its intraday high at around 11am. At the highs, the indices breached their psychological levels with the Nifty scaling 4,801 and the Sensex touching 16,049.
The debate on the Lokpal Bill in the Lok Sabha made investors jittery which resulted in the indices paring their gains and entering the negative territory in noon trade. Intense selling in the second half of the day pushed the market to the day’s lows in post-noon trade. At the lows, the Nifty fell to 4,724 and the Sensex went back to 15,800.
The market made a minor recovery towards the end of trade but closed in the red. The Nifty settled 29 points lower at 4,751 and the Sensex lost 97 points to end the day at 15,874.
The advance-decline ratio on the NSE tilted in favour of the declining stocks at 685:981.
Among the broader indices, the BSE Mid-cap index declined 0.69% and the fell 0.35%.
With the exception of the BSE Consumer Durables index (up 0.15%), all other sectoral gauges ended lower. BSE Realty (down 1.72%); BSE Metal (down 1.38%); BSE Bankex (down 1.23%); BSE PSU (down 1.18%) and BSE Power (down 1.08%) were the top losers.
The key gainers on the Sensex were Tata Power (up 1.92%); Bajaj Auto (up 1.19%); ONGC (up 0.50%); ITC (up 0.37%) and Larsen & Toubro (up 0.30%). The losers were led by DLF (down 2.70%); Cipla (down 2.68%); Coal India (down 2.44%); Tata Steel (down 2.42%) and Tata Motors (down 2.36%).
Reliance Communications (up 5.11%); Ranbaxy (up 2.69%); Tata Power (up 2.38%); Siemens (up 2.35%) and Ambuja Cement (up 2%) gained the most on the Nifty. The laggards were led by Axis Bank (down 3.21%); IDFC (down 3.15%); Kotak Bank (down 2.88%); DLF (down 2.77%) and Coal India (down 2.66%).
Markets in Asia closed weak on negative economic news and low trading volumes. Japanese shares settled lower as minutes from a central bank meeting held last month cautioned that the Eurozone debt crisis could hamper growth. This apart, South Korean consumer index fell sharply in December from November on the back of an already slowing global economy.
The Shanghai Composite declined 1.09%; the Jakarta Composite slipped 0.20%; the Nikkei 225 fell by 0.46%; the Straits Times shed 0.11%; the Seoul Composite contracted by 0.79% and the Taiwan Weighted settled 0.11% lower. At the time of writing, the key European indices were trading 0.5% to 1% higher and US stock futures were in the green.
Back home, foreign institutional investors were net buyers of stocks amounting to Rs113.43 crore on Monday. On the other hand, domestic institutional investors were net sellers of equities amounting to Rs118.98 crore.
Hindustan Construction Company (HCC) has received its board’s approval to raise Rs120 crore through the issue of Secured Redeemable Non-Convertible Debentures (NCDs) on private placement basis to Axis Bank. The stock declined 2.23% to close at Rs17.55 on the NSE.
Gift and greeting cards major Archies on Tuesday said the Department of Posts has allowed the company to sell postal stamps at its retail outlets across the country. The order is valid till 31 March 2012, as a pilot project and can be extended for the future also, the company said. The stock fell by 1.75% to close at Rs25.25 on the NSE.
Sun Pharmaceutical Industries’ US arm Caraco Pharmaceuticals has received tentative approval from the US Food and Drug Administration (USFDA) for marketing its generic dexmedetomidine hydrochloride injection in the US. Dexmedetomidine is a sedative and anaesthetic medication, and provides sedation without causing respiratory depression. Sun Pharma fell 0.72% to settle at Rs497.55 on the NSE.
According to the report, hygiene awareness, health, personal grooming and convenience seems to be the driving force behind increased consumption in middle India
‘Middle India’, a region made of about 400 towns with a population of one to 10 lakh each, has outperformed all-India fast-moving consumer goods (FMCG) growth story, says Nielsen’s report titled ‘Managing the Middle India Gold Rush’. Terming this region as ‘vastly underrated’, the report states that middle India would emerge as a key growth engine in a decade.
‘Middle India is are home to 100 million Indians and today constitute up to 20% of the country’s FMCG consumption. In fact, only the metros and Middle India have outpaced the all-India growth story in the last eight years. Even today, Middle India leads the pack across urban and rural segments for FMCG value growth rates,” says the report.
It states out of the Rs1.4 trillion ($280 billion) in FMCG sales in 2010, goods worth about Rs287 billion ($5.74 billion) were consumed by the Middle India population. This number makes up more than 20% of the overall FMCG sales, and 30% of the urban FMCG sales.
Interestingly, focus on hygiene, health, personal grooming and convenience seems to be driving the rapid growth in these towns. The top five fastest growing categories like diapers, scourers, liquid toilet soaps, acne preparations and air fresheners, which fared strongly in the past year, performed even better in 2011, indicating continued possibility of robust growth in the near future.
Middle India is also home to 30% of all urban stores, comprising over 900,000 million stores today. From 2002 to 2010, the region has seen a vast increase in sales values, going to Rs287 billion from Rs83 billion. Only metros have registered more growth, from Rs110 billion to Rs412 billion during the same period. This is a significant achievement for these smaller towns, considering the fact that the metros breached the Rs280 billion mark as recently as in 2009.
“Although some companies have partially penetrated the Middle India market, many tend to overlook smaller towns, ignoring the fact that these markets are perhaps easier to penetrate due to relatively sparse competition,” says the report.
However, a few major players with adequate capital and wide distribution networks are already cashing in on the opportunity.
The report from Nielsen says, “The annual turnover of the top ten FMCG players from the Middle India segment rose more than 42% or by Rs35.8 billion ($716 million) in just two years between 2009 and 2011.”
The fields can produce 10 million metric standard cubic metres a day (mmscmd) by 2016 and will help shore up output from the block, which has seen a 35% drop in output in the past 15 months.
After months of delay, the government may approve Reliance Industries’ (RIL) $1.529-billion investment plan for developing four satellite fields in the flagging KG-D6 block.
The KG-D6 oversight committee, which includes officials from the oil ministry and its technical arm—the Directorate General of Hydrocarbons (DGH)—is slated to meet tomorrow to consider the approval for the field development plan (FDP) for the D-2, D-6, D-19 and D-22 fields surrounding the currently producing Dhirubhai-1 and -3 fields.
Sources privy to the development said the fields can produce 10 million metric standard cubic metres a day (mmscmd) by 2016 and will help shore up output from the block, which has seen a 35% drop in output in the past 15 months.
The oversight panel, called the Management Committee, had in its last meeting on 2nd December refused to approve the investment plan saying that the proposal made in December 2009 was based on the prices of that year, and new rates need to be worked out at the current prices.
Sources said RIL and its partners, UK’s BP Plc and Niko Resources of Canada, felt reworking rates would require several months and would lead to loss of the four-month weather window in the Bay of Bengal that began this month.
As a compromise, RIL agreed to cap spending on the four satellite fields at $1.529 billion, give or take 15%. It includes $30 million pre-development activity cost that RIL and BP have been insisting on taking up during the next quarter for pre-engineering and other studies.
RIL has so far made 18 gas discoveries in the KG-D6 block. Of these, D-1 and D-3—the largest among the lot—were brought into production from April 2009 but output has fallen to 32.94 mmscmd this month from 54 mmcmd, reached in March 2010. Together with 6.86 mmscmd of associated gas produced from MA oilfield in the same area, total production from the block is 39.8 mmscmd.
The company had in July 2008 submitted an FDP for nine satellite gas discoveries (D-2, D-4, D-6, D-7, D-8, D-16, D-19, D-22 and D-23) with an estimated capex of $5.6 billion and reserves of 1,708 billion cubic ft (bcf). It later submitted an optimised development plan for the four satellite gas fields at the end of 2009. RIL estimated 1,733 bcf of in-place gas reserves in the four finds, of which 626 bcf can be produced. However, the DGH trimmed down the estimates to 1,342 bcf and 617 bcf, respectively.
Its proposal to invest up to $2.338 billion to produce about 15 mmscmd of gas from D-24 or the R-Series gas field has been pending in its eastern offshore KG-D6 block. The field has gross in-place gas reserves of 1.64 trillion cubic ft.
In the forenoon, Reliance Industries was trading at around Rs766.55 per share on the Bombay Stock Exchange, 0.74% up from the previous close.