The Indian markets have started today's session on a negative note. The benchmark indices opened below the breakeven mark and soon moved further into the red. They have not managed to pare their losses since then. Other key Asian markets are in the red with Japan (down 3.2%) leading the pack of losers. The US markets closed lower by 0.5% yesterday.
Currently in India, heavyweights from the BSE-Sensex are trading weak with metal and auto majors facing the brunt of selling activity. The BSE-Sensex is trading lower by around 81 points, while the NSE-Nifty is down by about 27 points. However, buying interest is being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.1% and 0.5% respectively. The rupee is trading at 45.15 to the US dollar.
Newspaper stocks have opened the day on a positive note. Gainers here include Jagran Prakashan and Mid-Day Multimedia. As per a leading business daily, Jagran Prakashan has bought the print business of Mid-Day Multimedia (MML). MML's print business was operated through a wholly owned subsidiary Mid-Day Infomedia. It consists of newspapers like Mid-Day, Sunday Mid-Day, Gujarati Mid-Day and Inquilab. Jagran Prakashan publishes the Hindi language Dainik Jagran, India's most read newspaper. MML will retain its seven radio stations. As per the deal, shareholders of MML will get 2 shares of Jagran for every 7 shares held in MML. As a result, the deal will result in about 5% dilution in Jagran. Although the deal is more favorable for the shareholders of MML, in our view it will help diversify Jagran's offerings and cater to a wider newspaper readership. It may be noted that the company had been keen on the English language market and currently publishes I-Next, a bilingual compact newspaper, and City Plus, a weekly English tabloid.
Financial stocks have also opened the day on a positive note. Gainers here include Shriram Transport and Mahindra Finance. Shriram Transport Finance declared its FY10 results. The company posted a 20% YoY growth in interest income, despite negligible growth in assets under management. The same is due to sale of assets on securitization. Net interest margins improved to 7.3%, from 7.2% in FY09, with lesser pressure on loan yields. Incremental lending was skewed towards used vehicles. Other income grew by 35% due to higher proportion of income from securitisation. The company posted a growth of 43% YoY in net profits during FY10, aided by lower operating costs. Net NPA ratio declined from 0.8% in FY09 to 0.7% during the year.