After starting today’s session on a positive note, the Indian indices have managed to hold onto their gains. Most key Asian markets are trading positive, with Japan being the only major loser. Stocks from the realty and metal space are trading strong, while stocks from health care and FMCG are mainly trading flat.
The BSE-Sensex is trading up by around 66 points, while the NSE-Nifty is up by about 17 points. Some buying interest is being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.4% and 0.6% respectively. The rupee is trading at 47.11 to the US dollar.
Capital goods stocks are trading mixed. While Jyoti Structures and Alfa Laval lead the gains, Triveni Engineering and ABB lead the losses. Crompton Greaves is also trading in the negative. The company recently declared its 1QFY11 results. The company posted 5% YoY growth in consolidated sales during the quarter. This was led by its 'consumer products' and 'industrial systems’ businesses. Sales from its largest segment of 'power systems' however, surprisingly declined 2% YoY during the quarter. This impacted the overall performance. Operating margins expanded to 12.9% YoY during the quarter, from 11.3% previously. Improvement was aided by lower raw material costs and a decline in other costs (both as percentage of sales). Despite a weak topline performance, net profits grew by 19% YoY during the quarter. This was largely due to a better operating performance from the company.
Metal stocks are trading mixed with Sesa Goa and Hindalco leading the gains. Tata Steel is also trading positive. According to a leading business daily, the company has started talks with lenders including Citigroup to refinance as much as US$ 5.4 bn in loans for its British unit. Royal Bank of Scotland, Standard Chartered and BNP Paribas are also part of the negotiations. The company has taken on the loans in order to fund its US$ 12.9 bn acquisition of Corus in 2007. Tata Steel is in talks for a five-year loan for Pound 2 bn of the debt. The bulk of payments will be due toward the end of the tenor. Interest rates for the loans are likely to be more than 300 basis points above the LIBOR (London interbank offered rate).