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Markets languish in the red
Tue, 5 Apr 01:30 pm

The benchmark indices in the Indian stock market continued to trade in the red on the back of heavy selling witnessed across most of the sectors. Nearly all the sectoral indices were trading in the red. However, stocks from consumer durables space are currently trading in the positive.

The BSE-Sensex is down by 156 points while NSE-Nifty is trading 42 points below the dotted line. However, BSE Midcap and BSE Small cap indices are up by 0.3% and 0.6% respectively. The rupee is trading at 44.43 to the US dollar.

Auto stocks are trading mixed with Tata Motors and Hero Honda leading the gains. However, M&M and Eicher Motors are trading weak. Maruti Suzuki India Ltd., the largest car maker in the Indian market recently gave a guidance for a 15% YoY growth of the top line. This compares to a 25% YoY growth seen during the last fiscal 25% YoY growth seen during the last fiscal. The sales in the last fiscal were also supported by easier financing terms, slew of new models and vibrant economy. The growth in the current fiscal (FY11) is driven by the 25% YoY increase in overall unit sales and 31% YoY increase in domestic unit sales. However, the rising interest rates and increased prices due to higher input costs may spoil the party in the current financial year. The Company expects a growth rate of 12-15% YoY in FY 12, which is in line with the industry growth rate. However, the stock is trading in the red.

Engineering stocks are trading in the mixed as well with Areva and Punj Lloyd leading the gains. However, Elgi equipments and Honeywell automation are trading weak. The Engineering giant Larsen and Toubro (L&T) achieved financial closure for Rs 121 bn Hyderabad Metro rail project. For this, the company would be relying on a consortium of banks for funds. The construction major had signed a memorandum of understanding (MoU) with Andhra Pradesh Government in September 2010. The MoU required L&T to attain the financial closure within a period of six months.

The company had also made a payment of Rs 3.6 bn to the Government in February this year as performance guarantee asking for the lowest viability gap funding (VGF), amounting to Rs 14.5 bn. The VGF is a Government of India initiated scheme wherein projects with low financial visibility are given grants of up to 40% of the project cost to make them financially viable under Private Public partnership project (PPP).

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