Markets maintain momentum

Tue, 6 May Closing

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Maintaining the day-long momentum for the second consecutive day, the Indian equity markets closed on an optimistic note. While the blue chip companies were found to be much in favor, the general sentiment remains cautious ahead of the election outcome. Stocks from sectors such as consumer durables, capital goods, and banks were leading the pack of gainers today. Notably, the BSE Small Cap and BSE Mid Cap indices outshined the benchmark indices and were up by 0.5% and 0.3% respectively. The BSE Sensex closed higher by 63 points and the NSE-Nifty was up by 19 points.

On the global front, the Asian indices have closed the day on a mixed note followed by the European indices too opening mixed. The rupee was trading at Rs 60.16 to the dollar at the time of writing.

Barring few such as Prime Securities and Shriram Transport Finance amongst few others, most of the stocks from the financials' space have closed the day in green. Leading the pack of gainers were the stocks of Motilal Oswal and Power Finance Corporation.

As per a leading financial daily, Housing Development Finance Corporation (HDFC) has announced its results for the fourth quarter (4QFY14) and financial year 2013-14 results. The institution has reported a 16.8% YoY growth in net interest income while net profits have grown by 10.8% YoY during 4QFY14. For full year FY14, the profits grew by 12.2% YoY. The net interest income was largely driven by 26% YoY growth in retail loan book and 15.9% YoY growth in total loan book. The other income has gone up by 33.1% YoY in 4QFY14 on the back of higher gains booked on sale of investments. Strong income performance has boosted the profitability for the quarter for HDFC. The net interest margins (NIMs) have fallen by meager 0.1% to 4.1% in FY14 from 4.2% in FY13. The capital adequacy and gross NPAs have stood at 17.9% and 0.7% respectively as at the end of March 2014. The institution has declared dividend of Rs 14.0 per share for FY14 (dividend yield 1.6%). The stock is down today by 1%.

Another leading financial daily reports that the private sector output for India has declined for the second consecutive month in April. A survey from HSBC states that with moderate rise in manufacturing production, the service sector output has shrunk further. The HSBC India Composite Output Index that maps both services and manufacturing has been reported to have gone up to 49.5 in April from 48.9 in March. However, it continued to hover around below 50 levels for the second successive month. The economic downturn, incumbent elections and contraction in new orders have impacted the business activity hampering the services sector. Most of the private sector companies have reportedly garnered lower new business; while the workforce number has more or less remained unchanged.

With private sector companies experiencing a slump, how will 2014 fare for Indian Inc? Share your views in the Equitymaster Club.