The Indian indices managed to move back to the positive territory during the previous two hours of trade. Currently, heavyweights in the banking and healthcare sector are trading firm while realty stocks continue to languish with significant losses.
Currently, the BSE-Sensex is trading up by around 39 points(0.2%), while the NSE-Nifty is by about 12 points(0.2%). However, the mid and small cap stocks are trading weak with the BSE-Midcap and BSE-Smallcap indices trading lower by 0.3% and 0.4% respectively. The rupee is trading at 45.13 to the US dollar.
Oil & gas stocks are trading mixed with HPCL and GAIL leading the gains while Reliance Industries & ONGC are facing selling pressure. HPCL has announced its 2QFY11 results. The company has reported a 25% YoY growth in sales and a positive bottom line. Topline increased due to growth in the sale of petroleum products. Despite lower gross refining margins of USD 2.66 per barrel vs. USD 3.72 QoQ, EBITDA margins turned positive mainly on account of efficient raw material cost management which declined by 7% (as a percentage of sales). Interest costs declined by 12% YoY due to effective treasury management and ample liquidity in the market. The bottomline turned positive during this quarter thanks to government support of Rs 28.3 bn in 1HFY11. However, the company had to absorb under-recoveries on sale of sensitive petroleum products amounting to Rs 17.2 bn during the same period.
Inflation in India slowed to the lowest level in nine months in October 2010. The benchmark wholesale-price index (WPI) rose 8.58% from a year earlier after an 8.62% increase in September. The pressure was most felt in food items. Food inflation was at a high level of 14.13%. However it did see some moderation from 15.71% in September. Inflation on manufactured items stood at 4.75%. However, this was a slight increase from the 4.59% inflation on manufactured items seen in September. With the slowdown in inflation, the RBI may relax its stance on further monetary tightening. The central bank already raised rates 6 times so far this year. Lending and borrowing rates were raised by 1.5% and 2% respectively this year. The Prime Ministerís Economic Advisory Council hopes that inflation will come down to 6.5% by the end of this calendar year (December). It hopes that the rate slows down further to 5.5% by March, 2011.