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Indian stock markets open weak
Tue, 1 Nov 09:30 am

Asian stock markets have opened the day on a mixed note. Stock markets in Hong Kong (down 1.4%), Japan (down 0.7%), Singapore (down 0.7%) and Indonesia (down 0.4%) are in the red while China (up 0.5%) and South Korea (up 0.3%) are in the green. The Indian stock market have opened the day on a weak note. Stocks in the capital goods and metals space are leading the losses.

The BSE-Sensex is trading down by 103 points (0.6%) and the NSE-Nifty is down by around 32 points (0.6%). Mid and small cap stocks are trading in the red, with the BSE Mid Cap and BSE Small Cap indices down by 0.2% and 0.1% respectively. The rupee is trading at 48.65 to the US dollar.

FMCG Stocks have opened the day on a weak note with Nestle and ITC in the red while Dabur India in the green. Dabur India announced its second quarter results for the financial year 2011-2012 (2QFY12). The sales grew by 29.7% YoY while the net profits grew by 8.4% YoY. However, the financial results for the quarter are not comparable with the corresponding period in the previous year as the recent quarter includes financials of the new acquisitions. Having said that, the management has highlighted that the operating environment for the quarter was extremely challenging. Despite this, Dabur managed to expand its margins by 16.5%. The profit growth was helped by strong growth in key business areas, calibrated price hikes and stringent cost-saving initiatives.

Banking stocks have opened the day on a weak note with ICICI Bank and Axis Bank leading the losses. ICICI Bank declared the results for the second quarter and first half of financial year 2011-2012 (1HFY12). The bank has reported 17% YoY growth in net interest income and 25% YoY growth in net profits for the half year period. The interest income grew by 30% YoY in 1HFY12 on the back of 20% YoY growth in advances. Net interest margin (NIM) remained stable at 2.6%. Operating costs moved up with cost to income ratio at 45% in 1HFY12 (41% in 1HFY11). The capital adequacy ratio was healthy at 18.9% at the end of September 2011. Other income grew only by just 4% YoY in 1HFY12 due to stagnant fee to other income ratio. Net profits grew by 25% YoY in 1HFY12 largely due to write back of provisioning.

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