India Markets Monday Wrap-Up: Buying Momentum Fuels Indices

by: Equitymaster

Indian equity markets had a buoyant trading session today. The indices began the day's proceedings on a firm note and inched upwards in the ensuing hours. Momentum was sustained in the final trading hour as well and the indices closed well above the dotted line. While the Sensex today closed higher by around 304 points, the NSE-Nifty today closed higher by 100 points. The BSE Mid Cap and the BSE Small Cap also did well to notch gains of 1% each. Gains were largely seen in metals, auto and banking stocks.

As regards global markets, barring China most Asian indices closed firm today while European indices have also opened in the green. The rupee was trading at Rs 55.44 to the dollar at the time of writing.

PSU banking stocks closed in the positive today with the key gainers being Oriental Bank, State Bank of India and Union Bank of India declared results for the first quarter of financial year 2012-2013 (1QFY13). Net interest income grew by 23.5% YoY in 1QFY13, on the back of 19.5% YoY growth in advances. NIMs (net interest margins) moved down marginally from 3.1% in 1QFY12 to 3% in 1QFY13. Net NPAs moved up from 1.32% in 1QFY12 to 2.2% in 1QFY13. Net profit increased by 10% YoY in 1QFY13 due to benign growth in other income as well as higher provisions. Capital adequacy ratio was comfortable at 11.6% at the end of 1QFY13 as per Basel II.

Auto stocks also closed firm today with the key gainers being Tata Motors (NYSE:TTM) and Ashok Leyland. TVS Motors also declared results for the first quarter of financial year 2012-2013 (1QFY13). Revenues grew by a tepid 4% YoY during 1QFY13 largely due to an increase in realisations as volumes remained flat. Motorcycle volumes fell by 8% YoY, while scooter volumes witnessed a tepid growth of 1%. Three wheeler volumes plunged 23% YoY during the quarter. Operating margins fell by 0.8% YoY to 5.9% in 1QFY13 on the back of higher staff costs and other expenditure (as a percentage of sales). Fall in operating profits trickled down to the bottomline, which also dropped by 13% YoY. The stock closed in the positive today.