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Sensex, Nifty volatile; metals, capital goods decline

10:00

The News International Team

10:50am Market Check

The Sensex declined 34.43 points to 26741.26 and the Nifty fell 12.50 points to 8005.05.
About 721 shares have advanced, 1652 shares declined, and 60 shares are unchanged.

10:40am Interview

Shares of Kitex Garments gained 1.3 percent. The third largest supplier of infant garments globally derives 85 percent of revenue from sale of infant garments and 15 percent from fabric to Kitex Childrenwear.

The company aims to be the number one player in infant wear market over the next few years. It derives 100 percent of garment revenue from exports, with 90 percent coming from the US and the rest 10 percent from Europe.

The company witnessed 40 percent growth in the year gone by and Sabu Jacob, chairman and managing director of Kitex Garments says it came on the back of capacity expansion. It plans to double capacity over the next three years.

The company expects to maintain 20-25 percent growth on a sustainable basis going forward. Jacob expects to see rise in margins on account of better efficiencies. He expects to improve efficiencies on both automation (production) and labour front.

There are also plans to merge Kitex Garments and Kitex Childrenwear perhaps in FY16. Jacob says Kitex Childrenswear enjoys marginally higher capacity and its margin profile is similar to Kitex Garments.

10:20am Rupee Check

The rupee slipped 4 paise to 60.98 a dollar in morning trade.

Geoffrey Dennis, UBS says the rising dollar has played a key role in the latest pullback in MSCI GEMs. With dollar strength typically associated with falling emerging markets (EM) equity markets, the UBS view of further dollar gains by end-2015 is a headwind for EM equity markets and supports our ongoing cautious positioning, he adds.

“These dollar moves should be accompanied by further weakness of most EM currencies, with end-2015 forecasts for the rupee at 65/dollar, says Dennis.

10:00am Equity benchmarks extended losses with the Sensex falling 100 points and the Nifty breaking 8000 level ahead of Supreme Court’s verdict on coal block allocation case today at 10.30 am. Jindal Steel, Sesa Sterlite and Hindalco dropped 1-3 percent.

The broader markets too slipped further with the BSE Midcap and Smallcap indices falling nearly a percent.

The Sensex declined 121.79 points to 26653.90 and the Nifty slipped 28.15 points to 7989.40. About 763 shares have advanced, 1386 shares declined, and 61 shares are unchanged.

Shares of L&T, TCS, Tata Motors, HDFC, Axis Bank, Bharti Airtel, BHEL and Maruti Suzuki plummeted 1-2 percent. However, ITC, HUL, Wipro, Sun Pharma, Coal India and M&M gained 0.3-1.3 percent.

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