Markets stage a smart recovery

Fri, 29 Oct Closing

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   01:30 pm   

Indian indices had a largely volatile trading session today. For the larger part of the day, markets oscillated to either side of yesterday's close. In the afternoon session, while intense selling pressure pushed the indices deep into the red, they staged a smart recovery in the final hour to close well above the dotted line. While the BSE Sensex closed higher by around 91 points (up 0.5%), the NSE Nifty gained around 30 points (up 0.5%). The BSE Midcap and the BSE Smallcap, however, dipped into the red with losses of around 1% and 1.5% respectively. Gains were largely seen in banking and FMCG stocks, while metals and IT stocks were at the receiving end.

As regards global markets, Asian indices closed mixed today while European indices have also opened on a mixed note. The rupee was trading at Rs 44.54 to the dollar at the time of writing.

ITC announced its 2QFY11 results today. The company's topline grew by 16.8% YoY in 2QFY11, bolstered by a strong growth in FMCG (including cigarettes), hotels, paper and packaging and agriculture businesses. Operating (EBITDA) margins increased marginally on the back of lower other expenditure (as a percentage of sales). Net profits grew by 23.5% YoY during the quarter. This increase was a result of growth in operating income, higher other income, lower interest charge and lower depreciation. The stock closed higher today.

Most PSU banking stocks closed weak today with the key losers being SBI, Central Bank and Corporation Bank. Corporation Bank had announced its 2QFY11 results. Net interest income grew by 46% YoY in 1HFY11 on the back of 33% YoY growth in advances. This was largely relying on the incremental offtakes to the large corporates. Also, the upward re-pricing of loans ahead of the base rate implementation helped matters. Corporation Bank's net interest margin (NIM) moved up to 2.6% in 1HFY11 with CASA funding being 25% of total deposits. Other income fell by 26% YoY during 1HFY11 due to lower treasury gains. Net profit margin improved by 0.7% to 16.4% in 1HFY11 thanks to lower operating costs. Capital adequacy ratio stood at 14.5% at the end of 1HFY11. Net NPA to advances moved marginally higher to 0.4% in 1HFY11.