Largecaps in favour today

Fri, 14 Jan 01:30 pm

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   Pre-Open   

   09:30 am   

   11:30 am   

   Closing   

Persistent buying activity led the Indian markets to rise above the dotted line during the post noon trading session. Currently, barring stocks from the auto spaces, buying activity is being witnessed across the space. Leading the pack of gainers are stocks from the IT, FMCG and healthcare spaces.

The BSE-Sensex is currently trading higher by about 130 points (up 1.2%), while the BSE-Sensex is up by about 75 points (up 1.3%). Stocks from the mid and smallcaps spaces have also found favour as the BSE Midcap and BSE Small cap indices are trading higher by 0.7% and 0.8% respectively. The rupee is trading at 45.21 to the US dollar.

Steel major SAIL announced its results for the quarter ended December 2010. The company reported a 15% YoY increase in revenues during the quarter ended 3QFY11. However, as operating expenses rose by 30% YoY, its operating profits declined by 30% YoY. Operating margins during the quarter fell to 15.9% from 26.1% during the corresponding quarter last year. Higher raw material and employee costs were reasons for the same. SAIL's profits for the quarter fell by one third on the back of a poor operating performance. During the quarter, other income dropped by 33% YoY, which added to the woes for the company. However, the impact on profits was not very significant as interest and tax expenses dropped by 46% YoY and 40% YoY respectively.

As for the performance during the nine month period ended December 2010, SAIL's revenues were higher by 8%, while profits declined by 28% YoY. Operating margins during the period stood at 17.1% as compared to 23.6% during the same period last year. While the company's operating margins were impacted by higher raw material costs, it was the employee expenses that led to a substantial decline in margins during this period. This increase in the latter was on account of the increase in wage provisions. The stock of SAIL is trading lower by 6%, while most of the metal stocks are currently trading higher with Hindalco, Nalco and Bhushan Steel trading firm.

Oil & gas stocks are currently trading firm with Petronet LNG, Gujarat Gas and Indraprastha Gas leading the gains. State gas utility GAIL has signed contracts to buy two cargoes of LNG from RasGas of Qatar to meet the rising energy demand this winter season. This year the winter has been severe across the country. This has resulted in added power loads. To meet the growing demand, gas-based power plants are running above their capacity levels. As a consequence, requirement of natural gas has seen a sudden upsurge in the country. Qatar is the world's largest LNG supplier and India is the largest importer of LNG in the world from Qatar.