Indian stock market indices continue to trade strong over the last two hours of trade on back of heavy buying activity witnessed across industry heavyweights. Oil and gas and banking stocks witnessed maximum buying interest, while IT stocks witnessed maximum selling pressure.
Energy stocks are trading strong led by Bharat Petroleum Corporation Limited (BPCL) and Cairn India. According to a leading financial daily, Oil and Natural Gas Corporation Limited (ONGC) is planning to enter the gas retailing business through a new subsidiary, ONGC Gas Limited. The company would use the new subsidiary for its foray into city gas distribution business and sale of imported liquefied natural gas (LNG). Though being the country's largest natural gas producer at around 55 million cubic meters per day, ONGC has virtually no presence in marketing of the environment friendly fuel. All of its gas is marketed by state-owned Gas Authority of India Limited (GAIL). However the plan to set up a LNG import facility at Mangalore is shelved. Gas business would help the firm de-risk its exploration business with oil and gas output from majority of its old and ageing existing field slated to hit a decline soon.
Banking stocks are trading in the green led by Allahabad Bank and UCO Bank. Union Bank of India has announced its results for the quarter ended March 2012. The bank has reported a 29.3% YoY rise in net profit, on the back of healthy recovery from bad debts and lower employee cost. Net interest margin (NIM) declined to 3.2% from 3.3% the previous quarter. The lender aims to maintain NIM of over 3% in the current financial year. NII was higher by 9.3% YoY. Due to higher recovery, the Gross NPA during the quarter improved to 3% (3.3% recorded in the October-December quarter). Net NPA ratio fell to 1.7% compared with 1.8% in the previous quarter. Capital adequacy ratio stood at 11.8%.