The Indian markets have started today's session on a positive note. The benchmark indices opened at the breakeven mark, but soon moved into the positive territory. These have managed to hold on to their gains since then. Other key Asian markets are also in the green with China (up 1.1%) leading the pack of gainers. The US markets closed higher by 0.6% yesterday.
Currently in India, heavyweights from the BSE-Sensex are trading strong with construction and metal majors attracting investors' interest. The BSE-Sensex is trading higher by around 80 points, while the NSE-Nifty is up by about 25 points. Buying interest is also being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.5% and 0.7% respectively. The rupee is trading at 47.09 to the US dollar.
Banking stocks have opened the day on a positive note. Gainers here include Yes Bank and J&K Bank. HDFC Bank announced its 1QFY11 results late yesterday. The bank reported an 8% YoY growth in interest income during the quarter on the back of a 40% YoY growth in advances. Of this, 10% growth in assets is attributable to a one off expansion in wholesale loans. The bank's net interest margins improved marginally due to lower cost of deposits. Operating expenses remained stable, with cost to income ratio at 48%, the same level as in 1QFY10. HDFC Bank's other income fell by 10% YoY due to lower treasury gains, although fee income grew by 15% YoY. Net NPA to advances improved marginally from 0.6% in 1QFY10 to 0.3% in 1QFY11. Provision coverage ratio stood at 77% at the end of 1QFY11 (70% in 1QFY10). Capital adequacy ratio (CAR) remained comfortable at 16.3%, with Tier I CAR at 12.4% in 1QFY11.
Energy stocks have opened the day on a positive note. Gainers here include Petronet LNG and Indraprastha Gas. As per a leading business daily, the petroleum ministry has sought a subsidy of Rs 135 bn to compensate the under-recoveries incurred by the three oil marketing companies (OMCs) - Indian Oil, BPCL and HPCL during 1QFY11. It may be noted that the government has asked upstream energy companies – ONGC, GAIL and Oil India - to shell out Rs 65 bn as part of a subsidy-sharing mechanism for 1QFY11. As the total under recovery for the quarter stands at Rs 200 bn, the balance is being sought from the finance ministry. However, the finance ministry contests the figure. In the upcoming Parliament session, it is likely to approve the subsidy only for FY10, which is to the tune of Rs 140 bn. This is because subsidy for FY11 would be given only after the sharing mechanism is decided.