A strong bout of profit booking took the markets deep into the red during the closing hours of trade. Having failed to recover much from those levels, the indices closed the day significantly in the negative. The BSE Sensex lost in the region of around 120 points (down 0.8%) today whereas NSE Nifty was down around 50 points (down 1%). BSE Midcap and small cap indices however bucked the trend and closed with marginal gains today. Four stocks declined for every one that gained on the Sensex today. IT and banking heavyweights like ICICI Bank, Infosys and TCS traded particularly weak today.
While most Asian indices closed in the red today, Europe is also trading weak currently. The rupee was placed at 46.6 to the dollar at the time of writing.
While corporate India is not exactly proving to be a big disappointment during the ongoing results season, we believe that most of the growth is already priced in and the markets are already looking elsewhere to take their cues from. Sadly, there isnít much happening in India and globally as well for them to look particularly buoyant. While the US and Europe remained mired in the usual deflation dilemma, growth in India too might get stifled a bit on account of the recent measures by the countryís central bank. Thus, it continues to look like itís going to be a stock pickerís market for quite some time to come.
Tyre major Apollo Tyres had a good day today as it closed with a gain. This was despite a poor set of numbers announced by the company. On a consolidated basis, its first quarter profits were almost flat. While the topline came in higher by 11%, it was the fall in operating margins that affected its bottomline. Results on a standalone basis were even more disappointing. Bottomline suffered a fall of 57% as extreme movement in rubber prices and a lockout in one of its factories in Kerala impacted growth. The company is hoping that things get sorted out soon on the Kerala plant front so that revenue growth can be given a momentum.
Indian Hotels was another of the major companies that came out with its results. Thanks to an uptick in the hotel sector, the company has managed to grow its standalone operating profits by 55% on the back of a 15% growth in topline. Net profits however fell by a huge 80% as an extraordinary item that was present last year was not there this year. Excluding the same, net loss has come down sharply from Rs 269 m in 1QFY10 to around Rs 9 m during the quarter gone by. The company also suffered on account of the closure of its flagship property, Taj Mahal Palace and Towers for renovation. The stock experienced a decline today.