Markets open with marginal gains

Thu, 5 May 09:30 am

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Asian stock markets have opened the day on a mixed note. While stock markets in Taiwan (up 0.7%) and Singapore (up 0.1%) are trading firm, the markets in South Korea (down 0.9%), Indonesia (down 0.5%), China (down 0.5%) and Hong Kong (down 0.3%) are facing selling pressure. Indian stock markets have opened the day with marginal gains. Stocks from the oil and gas and capital goods space are trading firm. However, pharma and technology stocks are trading in the red.

The BSE-Sensex is trading higher by around 40 points (0.2%), while the NSE-Nifty is up by around 5 points (0.1%). Mid and small cap stocks are trading in the green with both the BSE Midcap index and BSE Small cap index up by 0.3% and 0.2% respectively. The rupee is trading at 44.59 to the US dollar.

Banking stocks have opened the day on a firm note with Bank of India, Allahabad Bank and Andhra Bank leading the gains. However, Punjab National Bank (PNB) is trading weak. PNB reported its full year 2010-2011 (FY11) results. The bank recorded a 39% YoY increase in its net interest income. The growth was on the back of the 30% YoY growth in advances during the year. The net interest margin was higher at 4.0% as compared to the 3.6% seen in FY10. Other income recorded a muted growth of 5% YoY during the year. However, provisions increased by 75% YoY. This led to a 14% YoY growth in net profits. Net non-performing assets (NPA) stood at 0.845% of net advances at the end of March 2011. This is higher than the 0.53% seen during FY10. However, it still remains one of the lowest NPA levels in the industry. Capital adequacy ratio for the bank stood at 12.4% as per Basel II norms. The bank has declared a final dividend of Rs 22 per share which translates to a dividend yield of 2% at current prices. However, dividend payout ratio has declined to 15% as compared to the historic levels of 17.5%.

Auto stocks have opened the day on a strong note with Hero Honda leading the pack of gainers. The stocks of Ashok Leyland, Mahindra & Mahindra (M&M) and Tata Motors are also trading firm. Hero Honda has announced its results for the quarter and full year ended March 2011. The company's topline grew by 31% YoY during the quarter and 17% YoY during the full year. While operating profits grew at lower rate of 17% YoY during 4QFY11 (fourth quarter 2010-2011), the same declined by 5% YoY for the year ended FY11. The major reason for the subdued operating performance was high raw material costs. During the quarter, the bottomline dropped by 16% YoY on the back of a poor operating performance and a near fivefold jump in depreciation charges. For FY11, the net profits dipped by 14% YoY. The company has announced a dividend of Rs 35 per share for FY11.