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CRR cut gives a boost to Indian indices
Tue, 24 Jan 11:30 am

Indian stock markets traded in the positive during last two hours of trade on buying in index heavyweights. The 0.5% cut in cash reserve ratio (CRR) by the Reserve Bank Of India (RBI) boosted investor sentiments. The rate cut has brought in anticipation of higher GDP growth rate. Capital goods and Oil and gas stocks were trading in the green while realty and auto stocks were on the losing end.

The BSE-Sensex is trading up by 58 points and NSE-Nifty is trading strong by 16 points. BSE Mid cap and BSE Small cap indices are trading strong by 0.1% and 0.2% respectively. The rupee is trading at 50.05 to the US dollar.

Auto stocks are trading weak led by Force Motors and Ma Scooters. The leading auto company Maruti Suzuki has announced its financial results for the quarter ended December 2011 (3QFY12). The company reported sales of Rs 76636 m which is down 17.4% over the same period last year. The number of vehicles sold was 92,161 during December 2011 as against 99,225 vehicles in December 2010. The sales were down as a result of slowdown in the small car segment which is Maruti's key product category. Higher interest rates and rising fuel costs too posed a problem. Thus, net profit declined by 63.6% to Rs 2056 m. It stood at Rs 5651 in the year ago period. The stock is currently trading down by more than 1.5%.

Energy stocks are trading strong led by Essar Oil and Indraprastha Gas Ltd. (IGL). Gas Authority Of India Ltd. (GAIL) has announced results for the quarter ended December 2011. The company has reported a 35% YoY increase in net sales and a 13% YoY increase in net profits. During the third quarter of the current financial year, revenues from natural gas transmission business increased by 9% while revenues from the petrochemicals business increased by 54% as compared to the corresponding period of last year. The increase in net profit was mainly due to the increase in natural gas trading, natural gas transmission, petrochemical and liquid hydrocarbon. The company has approved payment of interim dividend of 30% or Rs 3 per equity share on the paid-up equity share capital of the company for the financial year 2011-12.

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