Indian stock markets open on a high note

Fri, 13 May 09:30 am

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Asian stock markets have opened the day on a mixed note. Stock markets in Malaysia (up 0.4%), Indonesia (up 0.2%) and Singapore (up 0.2%) are trading firm. However, markets in Japan (down 1.2%) South Korea (down 0.8%) and Hong Kong (up 0.6%) are facing significant selling pressure. Indian stock markets have opened the day on a high note. Stocks from the metal and FMCG space are leading the gains.

The BSE-Sensex is trading up by around 212 points (1.2%), while the NSE-Nifty is up by around 62 points (1.1%). Mid and small cap stocks are trading firm as well, with both the BSE Midcap index and BSE Small cap index up 0.7% each. The rupee is trading at 44.99 to the US dollar.

IT stocks have opened the day on a mixed note with Patni Computer and Wipro trading firm, while Mphasis is trading weak. NIIT Ltd has announced its financial results for the quarter and year ended March 2011. The company's topline grew by 9.7% YoY during 4QFY11 on the back of volume growth across all its business segments. During the full year 2010-11 (FY11), sales grew 4.1% YoY. However, excluding one-time pass through revenue last year in School Learning Solutions, sales grew by 9% YoY for FY11. Operating margin declined from 16.1% in 4QFY10 to 12.5 in 4QFY11mainly due to business development and project transition expenses. Net profits during the fourth quarter rose by 52.9% YoY, aided by higher other income (on account of divestment of non-operating assets). During FY11, net profits grew by 31.4% YoY. The company's board has recommended a dividend of Rs 1.5 per share for the year ended March 2011.

Banking stocks have also opened the day on a weak note with Oriental Bank, State Bank of Mysore and State Bank of India (SBI) trading in the red. The country's top lender SBI stated that it would raise US$ 3bn to US$ 4 bn in offshore debt this year. Of this, US$ 1-1.5bn would be raised as early as July this year. In addition to this, the bank also plans to enter the domestic bond underwriting business. Through this, the bank plans to cement its position as the top lender in the country. The bank's new head, Mr Chaudhuri has stated that SBI would be increasing its market share by a percent every year from now on. The bank currently has a market share of 23%. On another note, SBI has cut down its target for loan growth to 17-19% during the current fiscal year. The cut down is in light of the recent hike in interest rates due to which the bank expects loan demand to slowdown during the current year.