Profit booking drags largecap stocks

Wed, 6 Apr Closing

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   01:30 pm   

The benchmark indices in the Indian stock market opened in the positive today. However as the session progressed, they moved into negative territory. Mid-session, the indices managed to come off their day's lows. However, a negative closing could not be avoided and the markets ended the trading session in the red. The BSE-Sensex traded lower by around 106 points (0.5%) whereas NSE-Nifty closed lower by 20 points (0.4%). BSE Midcap and BSE Small cap indices on the other hand had a better outing, bucking the trend and closed higher by 0.4% and 0.8% respectively. The market breadth still remained positive with the advance to decline ratio on the Sensex being in favour of the former.

Asian indices closed mixed today, with China seeing some strong gains while Europe is trading in the green currently. Rupee was trading at Rs 44.2 to the dollar at the time of writing.

Bank stocks had a rough day on the bourses, with IOB being one of the few banks seeing some gains. Oriental Bank of Commerce closed lower. In a meeting with the RBI today, Bank CEOs urged the central bank not to deregulate the savings bank rate. This rate is currently fixed at 3.5%. With ever increasing inflation rates, depositors are losing the value of their money kept in savings accounts. The savings rate is currently the only bank rate which is still regulated. However, irrespective of the benefits to the common man, bankers are totally opposed to the idea of deregulation.

They believe that in such uncertain times, making this rate market driven will lead to a lot of instability in the market. Also, since saving accounts form a significant portion of total deposits, and higher rates could seriously impact bank's profitability. Bankers believe that this rate provides a sort of anchor, which the common man is aware of, and it becomes cumbersome to shift from savings to fixed deposits etc. With such vehement protests, the RBI may defer its decision, but it still does not solve the common man's problem.

NTPC, a leading player in the power utility space announced its provisional results for the quarter ended March 2011 (4QFY11) with its sales rising by 18% for the quarter. It also reported higher profits, which rose 24% YoY (year on year) versus the previous quarter. However, for the full year FY11, profit growth remained pretty much flat, rising just 1.1%. The company approved capital expenditure of Rs 264 bn for FY12. It also plans to add 4,320 MW megawatts of capacity during the period. It aims to generate 235 bsn units of power in FY12. NTPC's current installed capacity stands at around 34,194 MW. On the back of a strong set of quarterly numbers, the stock closed up by around 1.8% for the day.