India Markets Monday Wrap-Up: FY13 Off To A Positive Start

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Includes: EPI, IFN, IIF, INDY, INR, PIN, SCIF, SCIN
by: Equitymaster

Indices in the Indian stock market came off the day's highs during the closing stages of the day. However, there was enough buying interest to help them close the session on a positive note. Thus, while BSE-Sensex edged higher by around 75 points (up 0.4%), NSE-Nifty closed with gains of 22 points. BSE Mid cap and BSE Small cap indices performed even better and registered gains of 1% and 1.7% each. Nearly two stocks gained for every one that closed the day in the negative on the Sensex.

Most Asian indices also closed strongly today. Europe though has opened mostly in the red. The rupee was poised at Rs 50.8 to the dollar at the time of writing.

While the markets gained nearly 13% for the first quarter of the calendar year, they are down 11% on a YoY basis. Thus, a question that begs itself is will the Sensex recapture 20k levels in the near term. Frankly speaking, it is nearly impossible to take a call on such near term possibilities. But with an economy that has grown its nominal GDP by nearly 15% per year and valuation levels that are below normal, long term growth rate of the order of 15% is very much possible. Thus, the idea is not to worry about what levels Sensex will see next but to try and seek fundamentally good companies that will make the 15% growth a possibility.

Yes Bank, one of India's fastest growing private sector banks, closed stronger by 2% on the bourses today. The enthusiasm appears to be the outcome of a revival of its US$ 400 m worth share sale plan. The sale, which is supposed to happen in the European markets, is looking a stronger possibility now due to the improved conditions in the European capital markets. An enabling provision for fund raising to the tune of the US$ 400 m will be sought by the firm in its next board meeting. The bank has a target of growing its balance sheet to Rs 1,500 bn with advances of over Rs 1,000 bn by March 2015.

Most auto stocks closed strong today. With gains of more than 5%, TVS Motor emerged amongst the top gainers. What triggered the buoyancy was perhaps the sales numbers of the firm that just became public. As per reports, company's cumulative sales for the full fiscal FY12 grew 7.4% as sales crossed the two million mark. March sales however fell by 4.5% on a YoY basis. In three wheelers, the company sold 2,253 units in March 2012 against 4,300 units in the same month of the previous year, a strong fall of 48% YoY. Exports as well as domestic two wheeler sales also registered a decline for the month. Basically, it was the performance during the first nine months of the fiscal that seemed to have saved the company.