A rating downgrade for Indian banks and concerns over fiscal deficit took a toll on Indian stock market today that emerged as the sole loser in Asia. Indian indices had a rather volatile outing today with selective buying interest in FMCG and IT stocks. However, profit booking subsequently took toll and pushed the indices deep into the red in the final hours. While the BSE-Sensex closed lower by around 207 points, the NSE-Nifty lost around 68 points. The BSE Mid Cap closed lower by 78 points, while the BSE Small Cap closed lower by 74 points.
As regards global markets, Asian indices closed mixed today while European indices have opened on a positive note. The rupee was trading at Rs 50.1 to the dollar at the time of writing.
State Bank of India (SBI) declared its results for the second quarter of the financial year 2011-12 (2QFY12) today. The bank has reported 31% YoY growth in interest income and 12% YoY growth in net profits for the quarter. Net interest income grew by 28% YoY in 2QFY12, on the back of a 17% YoY growth in advances. The bank's other income dropped by 14% YoY in 2QFY12 on the back of lower fee income and profit on sale of investments. However the NIMs (net interest margins) moved up from 3.3% in 1HFY11 to 3.7% in 1HFY12, as the bank was able to improve its yields. Net NPAs (Non Performing Assets) which increased from 1.7% in 1HFY11 to 2.04% in 1HFY12 are a major concern for the bank. Also the bank's capital adequacy ratio stood at 11.4% (Tier-1 ratio at 7.47%) at the end of 2QFY12 as per Basel II, indicating the need for an urgent capital infusion.
As per a business daily, India's leading software services exporter, TCS, has won a US$ 2.2 bn order. The 15-year order from UK-based pensions and insurance provider Friends Life comes as the Indian IT sector looks to overcome stiff competition and a gloomy economic outlook. Europe is the second largest market for the Indian software firms, and the euro zone debt crisis is a worry for the sector that has been looking to increase its sales to the region to hedge against their excessive exposure to the United States.