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Metal stocks lead the downfall
Thu, 21 Feb 11:30 am

Indian equity markets continued to trade in the red during the previous two hours of trade. Almost all sectoral indices are trading in the negative led by metal and capital goods stocks.

The BSE-Sensex is trading lower by 170 points and NSE-Nifty is trading down by 50 points. BSE Mid Cap and BSE Small Cap indices are trading lower by 0.8% and 0.9% respectively. The rupee is trading at 54.46 to the US dollar.

Food stocks are mostly trading in the red led by Sterling Biotech and Tata Global Beverages. FMCG major Nestle India has announced its results for the fourth quarter ended December 2012. Backed by 9.6% YoY rise in domestic sales and 20.6% YoY jump in exports mainly to third parties, topline grew by 10% YoY. The domestic sales growth has been largely due to higher realizations and better product-mix. Reduction in raw material and other expenses enabled the company to expand operating margin by 2.2% to 22.6%. Net profits grew by 21% YoY on a 22% YoY increase in operating profit during the quarter. For the full year CY12, revenues were up by 11% YoY and operating margin increased by 1.3% to 21.8% on input cost savings. However, earnings for the year grew by a relatively subdued 11% YoY on a 18% YoY rise in operating profit. With production capacities coming on-stream during the year, there was a steep 81% YoY jump in depreciation charges and a five folds rise in interest outgo that pulled down profit growth for the year.

Mining stocks are trading weak led by Ashapura Minechem and Sesa Goa. As per a leading daily, Coal India is expected to lose an estimated 2.5 m tonnes of production and 2 m tonnes of sales because of the nationwide strike held on Wednesday. The company is set to lose more with the strike entering into its second day. The ongoing strike is being held to protest against broad economic issues that have little relevance to coal or Coal India. However, it has added to the woes of the coal miner which is as it is not being able to meet its production targets. In the meanwhile, Coal India's mines are running at full capacity but the Railways is not able to step up its wagon supplies beyond existing levels. The shortfall it seems will not be met for the rest of the year.

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