Markets plunge on opening

Mon, 17 May 09:30 am

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   Pre-Open   

   11:30 am   

   01:30 pm   

   Closing   

The Indian markets have started today's session on an extremely negative note. The benchmark indices opened below the breakeven mark and have plunged further into the red since then. Other key Asian markets are in the red with South Korea (down 2.9%) leading the pack of losers. The US markets closed lower by 1.5% last Friday.

Currently in India, heavyweights from the BSE-Sensex are trading weak with metal and construction majors facing the brunt of selling activity. The BSE-Sensex is trading lower by around 343 points, while the NSE-Nifty is down by about 96 points. Selling interest is also being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading lower by 1.3% and 1.5% respectively. The rupee is trading at 45.23 to the US dollar.

Energy stocks have opened the day on a negative note. Losers here include Reliance Industries and Castrol. As per a leading business daily, Reliance Industries has entered into a joint venture with Russian petrochemical major SIBUR to make butyl rubber. SIBUR will provide proprietary technology for polymerisation and its finishing, while RIL will supply monomers. The JV will produce the rubber at Reliance Industries' petrochemical complex in Jamnagar. This move comes on the back of the rapid increase in demand for rubber from India's automobile industry of late. In fact, the trend for rubber consumption is rising across Asia due to increased volumes of tire production. It may be noted that Reliance Industries recently entered into a joint venture with US based Atlas Energy to produce and market shale gas. The Indian petrochemical major has been on a look out for global acquisitions and tie-ups in order to access specialised technology and achieve greater scale.

Banking stocks have opened the day on a negative note. Losers here include SBI and Allahabad bank. SBI declared its FY10 results. The banking giant reported an interest income growth of 11% YoY in FY10 on the back of 17% YoY growth in advances. However, net interest margins slipped to 2.7% in FY10 from 2.9% in FY09. Cost to income ratio increased from 47% in FY09 to 53% in FY10 on the back of additional hiring. Gross NPAs rose to 3.0% from 2.9% in FY09, while net NPAs remained at 1.7%. Capital adequacy ratio stood at 13.4% (as per Basel II) at the end of FY10. The bank declared final dividend of Rs 20 per share, in addition to an interim dividend of Rs 10 per share.