Indian mkts stand out sole loser in Asia

Wed, 18 May Closing

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The Indian stock markets continued with their losing streak, closing at lower levels backed by profit booking in index heavyweights. After opening on a positive note, the indices could not hold on to the positive momentum for very long, and eventually, ended the day in the red. While the BSE-Sensex lost in the region of around 51 points (down 0.3%), NSE-Nifty ended lower by around 17 points (down 0.3%). The BSE Midcap and BSE Small cap indices however, were worse off, closing lower by around 0.6% and 0.8% respectively.

All Asian indices closed the day in the green, with India the only loser in the region. Europe is also trading in the green currently. The rupee was trading at Rs 45.05 to the dollar at the time of writing.

Bajaj Auto declared its results for the fourth quarter and year ended March 2011 a short while ago. The company reported a healthy 24% YoY and 39% YoY growth in sales for 4QFY11 and FY11 respectively. Strong sales performance was largely led by volume growth as well as higher realisations. The latter was especially strong due to its focus on high end motorcycles. For the quarter, growth in sales volumes stood at 17% YoY, while for the year volumes grew by 34% YoY.

The motorcycles segment, in particular, did well to log in an impressive volume growth of 35% YoY for the year. Sales volume growth of the commercial segment came in slightly lower at 28% YoY. Operating margins for the year, however, declined by 1.3% mainly on account of rise in raw material costs (as a percentage of sales). Net profits rose by a robust 96% YoY during the year as the company received extraordinary income to the tune of Rs 7.2 bn as against an expense of Rs 1.6 bn last year. Excluding this impact from both the periods, growth in net profits came in at a healthy 40% YoY in FY11 and was led by higher other income and reduction in interest costs and depreciation charges. The stock however closed around 2% lower for the day.

ONGC declared that its planned follow on share offering (FPO) in July 2011 would suffer if the government raised its subsidy burden. There were a few news reports that the government could raise upstream oil companies' contribution toward oil marketing firms' (OMCs) subsidy burden to 38.5% from 33% currently. According to news reports, the government could decide that upstream oil exploration companies like ONGC will have to contribute Rs 300 bn to help compensate fuel retailers like HPCL, IOC etc, for their subsidy burden. This amounted to Rs 780 bn in FY10. ONGC's stock price continued its negative run from yesterday, closing over 1% down today as well.