Indian stock markets end flat

he Indian stock markets had a lackluster outing on the bourses today post the market holiday yesterday. After opening in the green, markets remained in the positive zone for a bulk of the trading session today. However towards the final hour or so, the indices trended towards the dotted line and finally closed below par. While the BSE-Sensex closed lower by around 17 points (down 0.1%), the NSE-Nifty closed lower by around 9 points (0.2%). The BSE Mid Cap index also had a negative outing in trade today, closing 0.3% lower. The BSE Small Cap, however closed the day 0.2% higher. Consumer durables were the biggest index gainers by a fair margin, up 2.4%. IT stocks also trended higher. Auto and power stocks had a negative day on the bourses with blue chips trading in the red.

As regards global markets, major Asian indices had a positive today with the exception of India. European indices opened the day on a mixed note. The rupee was trading at Rs 52.95 to the dollar at the time of writing.

Bharti Airtel has declared its fourth quarter (4QFY12) and full year (FY12) results for financial year 2011-2012 today. The company saw its net sales increase by 14.9% YoY during the quarter. The growth was driven by the growth in total minutes of usage (MOU) on an absolute basis. Total minutes on the network increased by 9.4% YoY during the quarter. The realized rate per minute stood at 43.8 paise per minute. This was higher than the 43.1 paise realized during the same period last year but lower than the 44.6 paise realized during the previous quarter (3QFY12). Operating margins declined marginally to 33.3% during the quarter as compared to 33.6% during the same period last year. This was on account of higher network operating expenses as well as higher access charges which offset the increase in the SG&A expenses during the quarter (all as a percentage of sales). Net profits for the quarter declined by 28.2% YoY. This was on account of higher tax expenses as well as higher interest costs and depreciation charges during the quarter. For FY12, net sales grew by 20% YoY while net profits declined by 29.6% YoY. The stock closed the day on a positive note, rising over 2.5%.

Hero Motocorp announced its results for the fourth quarter (4QFY12) and the full year (FY12). Sales for the full year increased by 21% YoY while profits also saw a similar increase of 23%. Sales for 4QFY12 rose over 11% YoY and profits grew over 20% YoY on the back of higher other income and lower tax outlay. The company sold over 1.6 m two wheelers in the 4QFY12, and over 6.2 m vehicles for the full year. Hero Motocorp also declared a dividend of Rs 45 per equity share with a face-value of Rs 2. On the back of a good financial performance, the stock breached a new high today. It closed around 0.5% higher for the day.

Indian stock markets shed early gains
01:30 pm

Indian stock market indices have shed some gains in the last two hours of the trade but are still trading in the green. Among the sectoral indices, consumer durables and Technology stocks witnessed maximum buying interest while power and Auto stocks witnessed maximum selling pressure.

The BSE-Sensex is up by 14 points while the NSE-Nifty is trading flat. BSE Mid cap index and the BSE Small cap index are up by 0.08% and 0.34%. The rupee is trading at 52.93 to the US dollar.

FMCG stocks are mainly trading in the green led by Hindustan Unilever (HUL) and Marico. HUL has announced results for 4QFY12. The company registered a 21% YoY (year on year) increase in the bottomline. The growth in the bottomline was supported by growth across the segments. The net sales for the quarter were up 16% YoY. The domestic business volumes were up 10.1% YoY.

Gujarat Gas announced results for the first quarter ended March 2012. The company reported growth of 37% in sales on account of higher realizations. On a per day basis, the company sold 3.3 mscmd (million standard cubic metre per day). Overall, the gas sales volumes for the quarter stood at 304 mscm (million standard cubic metres) versus 303 mscm in 1QCY11. CNG segment registered a 13% YoY increase in volumes. The average realizations for the quarter stood at Rs 23.5 per scm from Rs 17.5 per scm in 1QCY11. Despite a hike in average realizations, the operating profits declined by 29.7% YoY on account of increase in gas sourcing costs (due to higher share of regasified liquid natural gas/RLNG). The bottomline declined by 9.6% YoY during the quarter mainly on account of increase in raw material costs. However, the decline was moderate relative to operating profit level as 'Other income' increased 2.9 times (YoY) due to lower effective tax rate. The net profit margins for the quarter stood at 9.0% versus 13.6% in 1QCY11. The stock was trading flat.

Consumer Durable stocks lead the rally
11:30 am

Indian stock market indices have managed to erase early losses and have traded strong over the last two hours of trade. Consumer Durable and FMCG stocks witnessed maximum buying interest while Oil and Gas and Auto stocks witnessed maximum selling pressure.

The BSE-Sensex is up by 80 points, while the NSE-Nifty is up by 21 points. BSE Mid Cap and the BSE Small Cap index are up by 0.57% and 0.77%. The rupee is trading at 52.79 to the US dollar.

Auto stocks are trading in the red led by Tata Motors and Bajaj Auto. According to a leading financial daily, Passenger vehicle (PV) sales in the domestic market for the month of April grew by 9% as compared to the same period last year. 8 out of the country's top 19 automobile makers together sold 171,130 units as compared to 157,101 units in April last year. Market leader Maruti Suzuki registered modest growth of 3.6%. Tata Motors sales of the Nano small car dipped by a fifth to 8,028 units. Passenger Vehicle sales in the company also dropped by 3%. However Mahindra & Mahindra (M&M) fared well in increasing sales by a third to 20,558 units on the back of the diesel models in its portfolio. General Motors also saw its sales drop by 20%.

Retail stocks are trading in the green led by Zodiac Clothing and Titan Industries. Titan Industries declared results for the fourth quarter of financial year 2012 and full year ended March 31, 2012. The company reported an increase of 28.3% YoY in net sales for the quarter and 35.5% YoY for the full year 2012. Revenues from sales of timewear were up by 25% YoY during the quarter. The same for jewellery saw an increase of nearly 30% YoY. Jewellery's contribution to overall sales increased from 77.2% to 78.1% during the last quarter. For the full year 2012, jewellery accounted for nearly 79% of total sales of the company. Operating margins were up by nearly 3% during the quarter.. Titan's net profit jumped by 72.2% YoY in the last quarter. Net profit for FY12 was up by 39.4% YoY. The company declared a dividend of Rs 1.75 per share implying a dividend yield of 0.7% at present.

Indian stock markets open in red
09:30 am

Asian stock markets have opened the day on a high note. Markets in Taiwan (up 1.8%), China (up 1.6%) and Hong Kong (up 1.1%) are leading the gains in the region. The Indian stock markets have opened the day on a positive note as well. Stocks in the consumer durables and FMCG sectors are witnessing maximum gains. However, auto stocks are witnessing selling pressure.

The BSE-Sensex is up by around 97 points (0.6%), while the NSE-Nifty is up by around 28 points (0.5%). Mid and small cap stocks are trading in the green as well with the BSE Mid cap and BSE Small cap indices up by around 0.7% and 0.8% respectively. The rupee is trading at Rs 52.63 to the US dollar.

Software stocks have opened the day on a positive note with Tech Mahindra, Mphasis Ltd and Hexaware Technologies leading the gains. Wipro Ltd has announced its acquisition of an Australian analytics firm, Promax Applications Group. The company has acquired the firm for a consideration of AUD 35 m (Rs 1,890 m). The management has stated that the acquisition will help Wipro strengthen its leadership position in analytics and information management services. The management of Promax has stated that it will help Wipro in offerings in trade and marketing management area. The deal is expected to close in the first quarter of the financial year 2012-2013 (1QFY13).

Energy stocks have opened the day on a negative with Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation and Hindustan Petroleum Corporation Ltd (HPCL) leading the pack of losers. Bharat Oman Refineries Ltd (BORL), a company promoted by public sector oil marketing company Bharat Petroleum Corporation Ltd (BPCL) with equity participation from Oman Oil Company, is set to raise US$ 140 m (approximately Rs 7.4 bn) for its balance capital expenditure at the refinery project at Bina in Madhya Pradesh. The funds will be raised via the ECB (external commercial borrowings) route. For the US-dollar term loan, BORL will pay an annual interest rate of 3.45% above Libor, or London inter-bank offered rate. The reason for the attractive interest rate on the ECB is the irrevocable and unconditional guarantee from BPCL. The mandated lead arranger for the ECB is Deutsche Bank AG, while the consortium of banks financing the 8-year term loan consists of Deutsche Bank, DBS, BNP Paribas, and Societe Generale.

Is your wealth manager trustworthy?

When it comes to managing money amateurs generally prefer hiring experts for their valued investment advice. But before you sign up with any wealth manager you should be aware about the potential conflict of interest which can result in mis-selling. For instance, the wealth manager may sell you a product which earns him a higher commission but is completely irrelevant to meet your portfolio objectives.

Thus, while hiring professionals to manage money, one has to be reasonably confident that the advice that comes in is unbiased. The first job of the wealth manager is to understand the risk profile and return expectations of the clients before he begins the financial planning exercise. Only after that the asset allocation must take place to meet the portfolio goals. Risk profiling is important because financial advice needs to be customized for every client. However, that rarely happens in the Indian context. A septuagenarian can be mis-sold an equity product if that garners a higher commission to the distributor. Further, bundled insurance products are also sold to the clients when in fact they do not require insurance cover at all. It is unbelievable that sometimes equity products are sold as guaranteed return devices! Thus, rampant mis-selling persists in Indian markets.

However, sometimes it might be argued that the wealth manager's job is to provide the financial advice. And it is up-to the customer to accept the same. However, the rule of Caveat Emptor (Buyer Beware) does not apply here. Wealth management includes a comprehensive solution to all financial needs. And it is the fiduciary responsibility of the manager to educate the clients about potential pitfalls of investing into asset classes that violate their risk/return objectives. However, ethics are aloof to the financial industry in general.

So, how does a lay investor figure out the perfect wealth manager for him?

Well, the first thing the investor needs to do is to check the historical track record. Past claims should have valid proof. Also, never simply go by the adviser's mouth. Consult a few experts and compare their advices to get a judgment of what they are trying to sell and what you need. Conducting own research on raw basis is also helpful. It is also necessary to ask about the experience and qualifications of the wealth manager. After all it is your hard earned money. These steps can prove to be a good cross-check in selecting the right wealth manager.