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Asian share markets are mixed today, tracking an overnight fall in US stocks. Financial markets in Japan are closed today for a holiday.

The Shanghai Composite gained 0.4% while the Hang Seng fell 1%.

In US stock markets, Wall Street indices fell late in the day, which robbed the S&P 500 index of another record high. Major indices ended mostly lower after being up for much of the day.

The Dow Jones Industrial Average ended flat while the Nasdaq dropped 1.3%.

Back home, Indian share markets opened deep in the red, following the trend on SGX Nifty. Benchmark indices have recovered most of early losses and are trading flat.

Latent View Analytics made its debut on the bourses today, listing around 170% higher than issue price.

The grey market premium (GMP) for the stock was suggesting a strong 147-152% listing pop on its debut.

The BSE Sensex is trading down by 110 points. Meanwhile, the NSE Nifty is trading lower by 15 points.

Tata Steel is among the top gainers today. Infosys, on the other hand, is among the top losers today.

Broader markets are trading on a strong note today. The BSE Mid Cap index gained 0.8% while the BSE Small Cap index is trading higher by 0.9%.

Barring IT and energy stocks, all sectoral indices are trading on a positive note with stocks in the metal sector, realty sector and capital goods sector witnessing most of the buying.

Shares of Raymond and Trident hit their 52-week highs today.

The rupee is trading at 74.50 against the US$.

Gold prices are trading up by 0.1% at 47,968 per 10 grams.

Crude oil prices fell, reversing gains in the previous session, on growing talk the US, Japan and India will release crude reserves to tame prices despite the threat of demand faltering as Covid-19 cases flare up in Europe.

In news from the mining sector, Vedanta’s promoters plan to buy stake in the mining conglomerate barely a week after it said it’s exploring options to simplify its corporate structure.

Twin Star Holdings and Vedanta Netherlands Investments B.V will buy around 170 m shares amounting to 4.57% stake in a block deal, according to filings for qualified institutional buyers (QIBs).

The offer is priced at 350 per share, valuing the transaction at 59.5 bn.

Last week, Vedanta had said it has appointed advisers to assist it in evaluating options, including demerger, spinoff, and strategic partnerships, to unlock value and simplify corporate structure.

The group intended to house its aluminium, iron and steel, oil and gas units in standalone listed entities.

Reportedly, the company’s board and advisers are completing their evaluation and will suggest steps soon.

The corporate restructuring efforts came a year after Vedanta’s delisting offer in October 2020 failed when it received a large number of unconfirmed bids and technical glitches marred the tender process.

As of September 2021 shareholding data, Vedanta promoters hold 65.2% stake in the company, followed by 34.5% stake held by the public.

Vedanta share price is currently trading up by 6.2%.

To know more, check out Vedanta’s 2020-21 annual report analysis.

Moving on to news from the FMCG sector, ITC has forayed into the Indian breakfast segment with a ready-to-cook and ready-to-mix range and staples under its FMCG brand 'Aashirvaad'.

Aashirvaad is ITC's largest brand in the non-cigarette FMCG segment with a consumer spend of over 60 bn.

The cigarettes-to-hotels conglomerate will now pitch itself against multinationals Kellogg, PepsiCo and Nestle, and Indian companies MTR and Gits Food.

Hemant Malik, ITC's divisional chief executive for food business, said that the company has launched breakfast staples, including rawa, suji and vermicelli, and plans to extend the brand into the adjacent categories of dalia, poha and multi-millet cereals.

As per reports, the breakfast staples market in India has a potential of over 100 bn, growing at over 12% every year.

The ready-to-cook, ready-to-mix and staples categories have higher margins compared with packaged commodities, but low penetration from branded players.

Malik said the company can utilise its existing backend sourcing since most are wheat-based and manufacturing capabilities.

ITC has introduced idli sambhar, upma, instant poha, instant suji halwa, idli and dosa instant mixes in the ready-to-cook category. It will also extend 'Aashirvaad' into besan.

ITC's foods business is the largest in the non-cigarette FMCG segment with gross revenue of 122.4 bn in fiscal 2021, growing 18% year-on-year (YoY). The food business is also profitable.

ITC share price is currently trading higher by 0.5%.

Speaking of the FMCG sector, have a look at the chart below which shows the performance of BSE Sensex and BSE FMCG index since 2009:

Sensex vs FMCG index.
View Full Image
Sensex vs FMCG index.

While the Sensex has offered 393% returns since 2009, the BSE FMCG index has gone up a staggering 532% returns over the same period.

Richa Agarwal, Senior Research Analyst at Equitymaster believes this outperformance could continue for many years.

As per Richa, with a rising population and standards of living, Indian's consumption demand for FMCG products will skyrocket over the coming years.

(This article is syndicated from Equitymaster.com)

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