Asian stock markets have opened the day on a mixed note. Benchmark indices in Japan (up 1.6%), Hong Kong (up 0.2%) and China (up 0.2%) are trading in the positive zone. However, stock markets in South Korea (down 1.5%), Indonesia (down 0.8%) and Singapore (down 0.7%) are trading in the red. The Indian stock markets have opened the day on a negative note. Auto and banking stocks are leading the losses.
March 2011 was good for the core infrastructure industries of the country. As per the key data released by the Government, the six core infrastructure industries grew by 7.4% in March. This is an increase from the 6.8% growth recorded in the month of February 2011. The six core industries include crude oil, petroleum refinery, cement, electricity, finished steel and coal. These industries account for nearly 26.7% of the overall industrial growth of the country. Production of crude oil and finished steel led the growth with an increase of 12.1% and 9.9% respectively during the month. Growth in electricity and cement slowed down to 7.6% and 6.5%, respectively as compared to 7.9% and 7.8%, respectively seen during the same period last year. Production of coal however remained a laggard and witnessed a decline of 1.2% during the month. Coal production has been an issue in the country as several projects are still awaiting environmental clearances. While the Government has promised to streamline the process, however, the process of getting a clearance still remains lengthy and cumbersome.
Steel stocks have opened the day on a negative note. JSW Steel and Tata Steel are the biggest losers in the sector. Steel Authority of India Ltd (SAIL) recently announced its fourth quarter (4QFY11) and full year ended results for FY11. The company has reported flat topline growth during the quarter ended March 2011. During the financial year 2010-11 (FY11), revenues rose by 5.1% YoY. However, operating profits dropped by 24.4% YoY and 22.8% YoY during the quarter and full year ended respectively. The main reason for the decline was the massive rise in coking coal prices which rose from US$ 128 in 2009-10 to US$ 222 in 2010-11. At the bottomline level, profits declined by 27.7% YoY for FY11. The net profit margins declined from 16.4% in FY10 to 11.2% in FY11.