The Indian stock markets continued to trade weak on account of selling pressure in heavyweights. Except for consumer durables, all sectoral indices are in the red. Stocks from the realty, healthcare, banking and metal sectors are leading the pack of gainers.
The BSE-Sensex is trading down by 74 points while NSE-Nifty is trading 22 points belowe Thursday's closing. The BSE Mid Cap index is trading flat while the BSE Small Cap index is trading down by 0.1%. The rupee is trading at 49.38 to the US dollar.
Energy stocks have been trading mixed with Cairn India, Petronet LNG and Oil and Natural Gas Corporation Ltd (ONGC) leading the pack of gainers. However, Gujarat Gas, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) are trading weak. ONGC has announced its results for the second quarter of financial year 2011-12 (2QFY12). The company's sales and net profits registered a growth of 24% Year-on-Year (YoY) and 60% YoY respectively. Operating profits were up 27.8% YoY during the quarter while margins at operating levels stood at 63.1%. The company registered highest ever net realizations at US$ 83.7 per barrel versus US$ 62.75 per barrel in the corresponding quarter last year. However, the management has expressed concerns of higher under recovery discount going forward which may have an adverse impact on net realizations.
Private banking stocks have been trading mixed as well with Jammu and Kashmir Bank Ltd (J&K Bank), Axis Bank and City Union Bank leading the pack of gainers. However, Yes bank, Kotak bank and Indusind Bank are trading weak. As per a leading financial daily, Axis Bank will be focusing on lending to small industries despite the issues over asset quality and doubtful macroeconomic situation. The asset quality in this segment has been affected by continuous rate hikes by Reserve Bank of India (RBI). Besides, the companies that are dependent on exports face risk on account of slowdown in the global growth. The bank is expecting a growth of 25% p.a in loans for SME (Small and Medium size enterprises) category for next two years. Currently, SME's share in the loan book stands at 15% of the bank's overall loan book. The bank will be cautious regarding commercial realty, textile and export led companies.