Sensex closes 1.4% lower for the week

Fri, 27 Apr Closing

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Indices in Indian stock markets languished close to the dotted line throughout the session today. After opening in the positive, a mixed set of results from India Inc. and selling pressure in select PSU heavyweights dragged the indices lower. Few banking, commodity and auto stocks, however, managed to evince significant investor interest. Both the BSE-Sensex and the NSE-Nifty closed marginally higher by 3 and 2 points respectively. The BSE Mid cap and the BSE Small cap indices lost around 0.2% each.

As regards global markets, most Asian indices closed lower today while European indices have opened a mixed bag. The rupee was trading at Rs 52.54 to the dollar at the time of writing.

ICICI Bank declared the results for the fourth quarter and financial year 2011-2012 (FY12). The bank has reported 19% YoY growth in net interest income and 33% YoY growth in net profits for the fiscal. The interest income grew by 29% in FY12 on the back of 17% YoY in advances while net interest margin (NIM) improved from 2.7% to 3%. Although the operating costs moved up by 19% YoY, the cost to income ratio remained stable at 42%. The bank's capital adequacy ratio was healthy at 18.5% at the end of March 2012. Net NPAs too improved to 0.6% of advances in 4QFY12 (0.9% in 4QFY11). Given its high CASA proportion of 43.5% of deposits, the bank sees improvement in margins with falling interest costs.

Energy stocks closed mixed today. While Gas Authority Of India Ltd. (GAIL) and Petronet LNG found favour, Oil and Natural Gas Corporation Ltd. (ONGC) and Reliance Industries Limited (RIL) closed into the red. As per a leading business daily, the ONGC board has approved an investment proposal of Rs 6 bn for developing the western periphery in Mumbai High South. This is as a part of phase III redevelopment of the field. The project is scheduled to be completed by December 2014. It is likely to result in incremental oil production of around 1 m tonne and 213.8 m cubic metre of gas by March 2030. Phase I has already been completed and Phase II is in the advanced stages of completion. The latter is expected to improve oil recovery to 34.5% by March 2030. It must be noted that the company aims to raise crude production by 15% to 28 MT by the end of FY14. That said, ONGC has been facing stagnation in the production of oil. Its subsidiary ONGC Videsh Ltd (OVL) has encountered some production issues from fields in Sudan and Syria. OVL's production at its Imperial Energy assets in Russia continues to stagnate at around 16,000 barrels per day.