Wednesday April 11, 11:30 AM
Steady climb... |
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By Equitymaster.com
The indices continued their forward march during the previous hour of trade on the back of renewed optimism among participants. Stocks from the steel, telecom and engineering sectors are currently receiving favour. However, stocks from the pharma and energy sectors are trading lacklustre. The overall market breadth is positive with the advance to decline ratio poised at 3.7 to 1 on the NSE.
The BSE Sensex is trading at 13,264 (up 86 points) while the NSE Nifty is trading at 3,869 (up 21 points). The rupee is trading at 42.87 to the dollar.
Stocks from the FMCG sector are currently trading a mixed bag with Colgate (COLGd.BO, news) and Nirma (up 1% each) being the major gainers. On the other hand, Gillette and HLL (down 1% each) are the major losers. According to a leading business daily, Marico, leader in the Rs 5 bn plus branded coconut hair oil market, with over 50% share (Parachute), may see its margins contract on account of rising copra (key input) prices. Presently, the company faces pressures on account of rising input costs that already were 54% of its revenues for the December 2006 quarter. Also, its ongoing brand building exercise, which is accompanied by increased advertising expenditure, is likely to further intensify the pressure on its margins. However, the company is looking at robust growth from it franchise business (Kaya skin care clinics) that had accounted for a 36% YoY increase in its topline for 3QFY07. The stock is currently trading marginally higher.
Power stocks are currently trading firm with Tata Power (TTPW.BO, news) (3%), Torrent Power (2%) and NTPC (1%) being the major gainers. According to a leading business daily, NTPC is looking for tie-ups with Chinese equipment suppliers to enhance its competitive bidding position in the forthcoming UMPP (ultra mega power projects). NTPC that had thus far largely relied on the PSU equipment major, BHEL (BHEL.BO, news) for equipment supply, was priced out in the bidding for the initial UMPP at Sasan, mainly with competing bidders having tied-up with low-cost Chinese vendors. Another reason that may have moved NTPC to source its equipments from the Chinese suppliers is that the Chinese equipment suppliers have an edge over the local players in terms of price and delivery-lead time owing to over capacity in the Chinese domestic markets. While this may garner well for the company (that intends to take its installed capacity from 27,404 MW currently to over 75,000 MW by 2017), it might have a dampening impact on domestic equipment manufacturers.
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