The Indian markets have started on a strong note. The benchmark indices opened above the breakeven mark and have managed to stay in the positive territory since then. Asia is currently trading in the green with Japan (up 1%) leading the pack of gainers. The US markets also closed higher by 0.5% yesterday.
Currently, in India, heavyweights from the BSE-Sensex are trading a mixed bag with energy, metal and auto stocks leading the pack of gainers. However, the software heavyweights are in the red. The BSE-Sensex is trading higher by 96 points, while the NSE-Nifty is up by 31 points. Buying interest is also being witnessed among mid and small-cap stocks as the BSE-Midcap and BSE-smallcap indices are trading higher by 0.9% and 1.1% respectively. The rupee is trading at 45.48 to the US dollar.
Tobacco stocks have opened the day on a mixed note. ITC has opened in the green, while VST Industries and Godfrey Phillips are in the red. VST Industries announced its 3QFY10 results yesterday. The company’s sales fell by 1% YoY during 3QFY10. The decline could be a result of restriction in smoking areas and the graphic warning which has been introduced on cigarette packs. Operating income fell by 17% YoY during the quarter due to increase in raw material and employee costs. However, it was offset by the foreign exchange gain during the quarter. Net margin fell by 3.3% due to lower operating profit and decrease in other income. As a result, net profit for 3QFY10 fell by 20.3% YoY.
Banking stocks have opened the day on a strong note. Gainers here include Union Bank and Central Bank. As per a leading business daily, banks are increasingly taking the outsourcing route to ramp up their ATM networks while conserving their resources. Banks such as SBI, Axis Bank and Central Bank are opting for this method. The cost of setting up and running the ATM is borne by the service provider while the bank pays a fee for every transaction. The bank continues to hold the licence and deploys its own cash. It may be noted that ATM transactions have grown by 40% after RBI allowed accountholders to access any ATM without any charge for five withdrawals up to Rs 10,000 per month. In our view, this is a positive development for the industry as it will help banks save capital expenditure, yet continue with their branding efforts.