Indian stock markets slipped into the red on profit booking in heavy weights over the last two hours of trade. Stocks from the auto and metals space are trading weak, while stocks from the IT and power space are trading firm.
The BSE-Sensex is trading down by 37 points while NSE-Nifty is trading 17 points below the dotted line. BSE Midcap index is trading flat while BSE Small cap index is trading 0.2% above yesterday's closing. The rupee is trading at 44.48 to the US dollar.
Food and tobacco stocks are trading mixed with VST Industries and Agro Tech Foods trading firm, while Tata Global Beverages and GSK Consumers are trading weak. VST Industries declared its 1QFY12 results. The company's top line grew by 16% YoY on robust demand for cigarettes while its operating income shot up by 143.7% YoY. Operating income growth was a result of fall in raw material costs by 2.3% YoY and in other expenditure by 29.3% YoY. Staff costs grew slower than sales at 7.2% YoY helping operating income growth. Net profit grew by 90% YoY. This was slower than operating income and is a result of fall of 30.3% YoY in other income and increase of 9.7% in effective tax rate. Effective tax rate stood at 31.2% for the quarter.
Auto stocks are trading mixed with Tube Investment and Ashok Leyland leading the pack of the gainers. However, Tata Motors and Hero Honda are trading weak. As per the leading financial daily, India's No.2 two-wheeler maker Bajaj Auto Ltd has abandoned the idea of developing low-cost minicar in India for Renault SA and Nissan Motor company. Last year the company had signed a memorandum of understanding (MOU) with the Renault-Nissan alliance to develop an ultra low-cost car for India. The company finds this project as commercially unviable. As per Rajiv Bajaj, managing director of the company, the company does not want to go into the low-margin passenger car business. Instead, the management is planning to launch a low-cost commercial vehicle in the month of January next year. The stock of the company is trading in the red.