Wednesday March 14, 11:30 AM
Bear stronghold continues... |
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By Equitymaster.com
The indices continued to reel under pressure during the previous hour of trade as selling activity continued unabated across index heavyweights. The bear stronghold is exemplified by the fact that not a single stock on the NSE Nifty is trading firm. Expectedly, the overall market breadth is negative with the decline to advance ratio poised at 7.7 to 1 on the NSE.
The BSE Sensex is trading at 12,567 (down 415 points) while the NSE Nifty is trading at 3,649 (down 121 points). The rupee is trading at 44.10 to the dollar.
Food stocks are currently trading weak with Britannia (down 3%), ITC (2%) and Tata Coffee (1%) being the major losers. According to a leading business daily, the country's second largest tea company in terms of market share is looking to make acquisitions in the iced tea category, as it vies to position itself from a tea company to a beverage company. While this segment may not be a major segment currently, the company expects it to be so some time in the future. The company is looking at both the organic as well the inorganic growth route. However, the operations in the iced tea segment would finalized after giving due consideration to its current model which is more grocery driven as opposed to the iced-tea which is more beverage driven. The stock of Tata Tea (TTTE.BO, news) is currently trading marginally lower.
Shipping stocks are trading weak with Bharti Shipyard (down 4%), Shipping Corporation of India and G.E. Shipping (down 2% each) being the major losers. According to a leading business daily, Shipping Corporation of India (SCI) will invest around US$ 3 bn over the next four years to acquire 16 vessels. This is apart from the US$ 1 bn capex already lined up by SCI to buy 12 vessels that are to be delivered between 2008 to 2010. This will also help SCI's revenues to grow as Western markets are more environment conscious and have a lesser preference for choosing old vessels as their carriers. With new vessels included in its fleet, SCI will stand a better chance of gaining access to these markets as well. The company plans to fund the acquisition of the vessels with debt to equity mix of either 80:20 or 75:25.
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