Stock markets in other parts of Asia ended the day on a firm note as Japan, China and Hong Kong ended higher by 0.2%, 0.8% and 0.6% respectively. The rupee was trading at Rs 59.08 to the dollar at the time of writing.
Cement stocks ended the day on a firm note today with heavyweights Ultratech Cement, Ambuja Cement and ACC leading the pack of gainers. In fact, cement stocks have been in demand for a while now. This is despite the fact that their earnings have been trending downwards. In our view, the current rally is seemingly driven by sentiments and as such warrants a cautious approach. While the newly formed government's focus may be on pushing infrastructure, it should be kept in mind that things will not change overnight and for fundamentals to change, the earnings profile of the sector will have to improve. Stocks of Ultratech Cement ended higher by about 6% today, while ACC and Ambuja Cement ended with gains of 4% and 5% respectively. Amongst the smaller players, Prism Cement and Mangalam Cement ended with gains of about 10% and 5% respectively.
Stock of steel companies ended the day on a weak note with Jindal Steel, JSW Steel and Tata Steel leading the pack of underperformers. Steel major Steel Authority of India (SAIL) announced its results a while back. The company reported an income growth of 10% YoY while profits grew by 1.5% only. These are figures for the quarter ended March 2014. While the company did well on operating front - as margins expanded on a YoY basis leading to profit growth of 39% YoY, net profits were impacted by lower other income coupled with higher finance charges. The stock of SAIL was the worst performing steel stock today with it ending the day lower by about 3%.