The Indian stock markets had a weak outing on the bourses on the last trading day of the week. However, the 0.5% rate cut on Tuesday helped the markets see a 2% gain this week. After opening slightly below the dotted line, markets remained flat for most of today's session. However, towards the final hour of trade the indices saw a sudden sharp drop. The indices recovered from the day's lows towards the end of trade, but still closed weak. While the BSE-Sensex closed lower by around 130 points (down 0.7%), the NSE-Nifty closed lower by around 42 points. The BSE Mid cap and BSE Small cap, also had a disappointing day. The smaller indices closed lower by 1% and 0.5% respectively. FMCG and auto were the only ones to close in the green. Capital goods and power continued to take a beating.
As regards global markets, major Asian indices had a mixed outing today with. European indices opened the day on a positive note. The rupee was trading at Rs 52.13 to the dollar at the time of writing. Breaching the 52 mark, the rupee has hit a new three-month low. The widening current account deficit continues to put pressure on the currency.
Commercial real estate is sometimes a risky bet as projects may not get completed or sold if the real-estate market takes a turn for the worse. However, bank lending to the commercial real estate sector grew 9% YoY in February 2012. This is despite the fact that the Reserve Bank of India (RBI) has cautioned lenders to only disburse funds to projects where necessary approvals are in place. According to the Reserve Bank of India (RBI) data, banks sanctioned about Rs 12 bn in loans to the sector in February 2012 against Rs 11 bn in February 2011. Banks normally charge an interest rate of 13-16% compared to 20% or higher sought by fund houses, making bank lending attractive for builders seeking money for project completion and to meet working capital requirement. On the other hand private equity involvement in the sector fell more than 50% YoY in February. Banking stocks had a relatively poor outing on the bourses today.
Hindustan Zinc has announced its results for the quarter and full year ended March 2012. The company has reported a 3.2% YoY decline in net sales and 20.2% YoY decline in net profits for the quarter ended March 2012. For the full year ended March 2012 the company posted a 13.6% YoY and 12.8% YoY increase in net sales and net profits respectively. Operating profits declined by 15.5% YoY during the quarter on account of high raw material cost. Operating margins also declined by 7.7%. Net profits declined on account of higher input cost, lower zinc and lead prices and higher taxes. Net profit margins declined by 9.6%. The company has announced a final dividend of 45% which is 0.9 per equity share. The total dividend, including interim dividend already paid for FY12 is 120% or Rs 2.4 per share, which is the highest dividend ever proposed by the company.