Indian stock markets opened the day well below the dotted line. They continued trading weak for most of the session, not once crossing the dotted line. However towards the final hours of trade the markets moved off their day's lows towards the breakeven mark. But, they still remained in the negative territory towards the end of trade today. While the BSE-Sensex closed lower by around 107 points (down 0.6%), the NSE-Nifty closed lower by around 38 points (down 0.8%). The BSE Mid Cap and the BSE Small Cap
had a worse outing as they closed lower by 0.9% and 1.3% respectively.
stocks took a severe beating falling around 4% in trade today. Fears were mainly that the sluggish economic growth and high interest rates and inflation would continue to affect earnings growth. Index majors like Bharat Heavy Electricals Ltd (BHEL) and Larsen & Tarbo (L&T) hit their 52 week lows today, but they recovered slightly towards the close on bargain hunting. Power and oil and gas stocks also closed the day weak. Consumer durables and FMCG stocks were however trading in the positive zone.
As regards global markets, Asian indices closed in the negative today. European indices however opened on a positive note. The rupee was trading at Rs 50.69 to the dollar at the time of writing.
Titan Industries announced that it is set to acquire Swiss watch brand 'Favre Leuba' for up to EUR 2 m (over Rs 130 m). This is part of the company's strategic initiative to further expand its product offerings. The rationale behind the acquisition is to strengthen the company's existing watches portfolio with a Swiss heritage brand. It has signed a binding offer with Valfamily SL Spain and Maison Favre Leuba of Switzerland for the acquisition. Post this, the watch maker will hold exclusive global rights of the brand. This brand which was created in Switzerland in 1737 has a rich history in international markets including India. The stock closed the day 2.9% higher today.
Tech Mahindra recently announced its results for the second quarter of the financial year 2011-12 (2QFY12). Net sales grew by 3.2% QoQ on the back of a good growth in the business of non-BT (British telecom) business during the quarter. Operating margins fell by 3.4% QoQ to 15.3% as compared to 18.7% in the previous quarter (1QFY12). This was on account of higher selling, marketing and administration expenses (as a percentage of sales). Bottom line declined by 13.1% QoQ mainly due to the decline in the margins at operating levels. Net profits declined despite a higher contribution from the share of profits from the its associate Mahindra Satyam, as compared to the previous quarter.
The number of active clients at the end of the quarter remained at 128 compared to the previous quarter. During the quarter, revenues from its biggest client which is BT declined by 4.9% QoQ. The total number of software professionals went down during the quarter due to decline in the business from BT and internal optimization. The company performed well in the 'Rest of the World' market during the quarter. The management expects to continue its growth momentum in emerging market. On BT front, as per the management, there would be pressure on the growth as well as margins for another two quarters. However, the management is very optimistic on the non-BT front. The stock closed 1.5% lower for the day.