Indian Stock Markets Come Off Day's Highs

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

The Indian stock markets had a positive outing on the bourses today, having started the day well in the green. After opening in the green, markets moved higher in the mid-morning session. However, they started converging towards the dotted line towards the last two hours of trade. Towards the final hour of trade there was some volatility seen in the indices, however they managed to hold their heads above water and close the day in the green. While the BSE-Sensex closed higher by around 40 points (up 0.25%), the NSE-Nifty closed higher by around 12 points (0.25%). The smaller indices also had a lackluster day on the bourses. BSE Mid cap index closed flat. The BSE Small cap, however closed the day 0.1% higher. FMCG stocks were the top gainers by a fair margin, followed by realty. Consumer goods and consumer durables stocks however closed weak.

As regards global markets, major Asian indices had a mixed outing today. European indices opened the day on a weak note. The rupee was trading at Rs 54.51 to the dollar at the time of writing, a record low for the Indian rupee against the U.S. dollar.

Two-wheeler manufacturer Bajaj Auto declared its results for the fourth quarter and the year ended 31st March 2012. Net sales grew by 12% YoY during the quarter led by a 7% YoY increase in volumes and an approximate 19% increase in average net realisations. Volumes increased on account of higher export sales with the same increasing by 26% on a YoY basis. Overall domestic volumes marginally declined 4QFY12 as compared to the corresponding quarter last year. Operating margins expanded by 0.4% YoY on the back of lower raw material and employee costs (as a percentage of sales). Net profits declined by a sharp 45% YoY. This was on account of lower extraordinary income during the period. Excluding the same during both the periods, net profits actually increased by 11% YoY during the quarter. During FY12, the company's revenues and profits (on adjusting extraordinary items) increased by 19% YoY and 20% YoY respectively. Sales volumes rose by 14% YoY during the year. The board recommended a dividend of Rs 45 per share. The stock closed the day almost 3% lower.

Public sector bank Oriental Bank of Commerce (OBC) cut interest rates on home and car loans by up to 1.5%. As per the revised rates, interest rate up to Rs 3 m would be available at 10.50% or at the base rate for the existing customer effective today. The earlier rate was 10.90%. The bank has also revised criteria for being eligible for a loan and raised the tenure up to 25 years from earlier limit of 20 years so that burden on the borrower is minimized. The bank has cut interest rate on vehicle loans to as low as 11.25%. It has also raised the maximum repayment period to 7 years from existing 5 years. The rate has been revised downward from 12.65% for a 3-year maturity. The bank's retail portfolio consisting of home, auto, personal loans is around 10% per cent of its total loan book. The bank believes that there would be no adverse impact on margins due to lowering of rates as there would be an increase in volumes. The bank aims to maintain its Net interest margins over 3% during the current fiscal. The stock closed the day 0.5% lower.