Late upswing fuels indices

Wed, 1 Feb Closing

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Indian stock markets languished in the red for the larger part of the day today on the back of relentless selling witnessed across heavyweights. However, in the later hours, investors resorted to buying at lower levels and this pushed the indices above the dotted line. The momentum was maintained in the final trading hour as well and the indices closed well into the positive. While the BSE-Sensex closed higher by around 107 points (up 1%), the NSE-Nifty closed higher by around 36 points (up 1%). The BSE Mid cap and the BSE Small cap also did well to notch gains of 1% and 2% respectively. Gains were largely seen in auto and metals stocks.

As regards global markets, Asian indices closed mixed today while European indices have opened in the green. The rupee was trading at Rs 49.38 to the dollar at the time of writing.

Energy stocks closed mixed today. While Indraprastha Gas, Gujarat State Petronet and Cairn India found favour, industan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) closed into the red. Indraprastha Gas Ltd (IGL) announced results for the third quarter ended December 2011. The topline registered an increase of 45.1% YoY during the quarter on account of hike in gas prices and higher volumes in both CNG and PNG segments. For the nine months, sales were up 45% YoY. The operating profits were up by 16.4% during the quarter with margins at 22.7%, down from 28.3% in the corresponding quarter last year. This was on account of increased costs of sourcing gas and added burden due to rupee devaluation. For the nine months, operating profits were up by 29.1% YoY and margins came at 26% (versus 29% last year). The net profits for the quarter grew just by 2.9% YoY, with margins at 10.4% versus 14.7% last year on account of a surge in interest costs. For the nine months, the bottomline was up 18.8% YoY, with margins at 12.6%, versus 15.4% last year.

Rural Electrification Corporation (REC) also announced results for the third quarter ended December 2011. Income from operations grew 27% YoY in 3QFY12 and by 26% in 9mFY12 on the back of a 25% increase in the loan book. Net interest income however grew at a slower pace on higher interest costs, rising 19% YoY in 3QFY12. Disbursements grew by 11% YoY, sanctions however fell by 7% YoY in 9mFY12. Non-interest income fell by 45% YoY during the quarter, while falling 21% during the first half. Net interest margins (NIMs) fell to 4.4% at the end of 9mFY12 from 4.6% at the end of 9mFY11 on higher borrowing costs. Bottomline grew by a marginal 16% YoY in 3QFY12 on a forex gain and by a lower 10% in 9mFY12 on account of forex losses; higher interest costs, provisioning, and lower other income. The company declared an interim dividend of Rs 5 per share. The stock closed higher today.