Global cues weigh on Indian stock markets

Thu, 2 Jun 09:30 am

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Most Asian stock markets have opened the day on a weak note. Stock markets in South Korea (down 1.1%), Hong Kong (down 1.6%), China (down 1.6%) and Japan (down 1.6%) are trading in the red. The Indian stock markets have also opened the day on a weak note. Stocks in the banking and realty space are leading the fall. However, FMCG stocks are trading firm.

The BSE-Sensex is trading lower by around 134 points (1%), while the NSE-Nifty is down by around 55 points (1%). Both the BSE Midcap andBSE Small cap indices are also down by about 0.8% each. The rupee is trading at 44.9 to the US dollar.

Aluminium stocks have opened the day on a weak note with Hindalco and National Aluminium Company Ltd (NALCO) trading in the red. NALCO has announced its results for the quarter and financial year ended March 2011. The company's topline has registered a rise of 11% YoY and 18% YoY during the quarter and full year ended March 2011 respectively. High operating costs during the quarter caused EBITDA margins to decline from 28.6% in 4QFY10 to 23.3% in 4QFY11. At the bottomline level, poor operating performance and high depreciation charges caused net profits to decline by 18% YoY during the quarter. However, during the financial year 2010-11, lower costs of raw materials and power & fuel (as a percentage of net sales) led operating margins to improve from 19.5% in FY10 to 25% in FY11. Overall improvement in operating performance during the year saw the bottomline rising by 31% YoY. The company's board has recommended a final dividend of Rs 0.5 (10% on face value of Rs 5 each) per share on the revised equity capital.

Oil & gas stocks has opened the day on a mixed note with ONGC and Indian Oil Corp (IOC) trading firm. However, GAIL and Petronet LNG are trading in the red. ONGC has announced the fourth quarter results for financial year 2011 (4QFY11).The company has reported a flattish growth of 0.7% YoY and a 26% YoY decrease in bottom line The operating profits for the quarter declined by 15% YoY, with margins down 9% (YoY). The discount to oil marketing companies was reported at Rs 121 bn for the quarter (up 143% YoY). For the full financial year, the subsidy burden came at Rs 249 bn (up 115% YoY). The company's board has recommended a final dividend of Rs 0.75 per share. Along with the interim dividend, this translates into a dividend of Rs 8.75 per share for the full financial year, implying a dividend yield of 3.1%. ONGC is currently trading in the red.