Indian indices trade in the red

Wed, 30 May 11:30 am

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Indian equity markets recovered from the early lows in the last two hours of the trade but are still trading below the dotted line. The sectoral indices are trading mixed with software stocks leading the gains, while Auto and realty stocks are trading the weakest.

The BSE-Sensex is trading lower by 70 points and NSE-Nifty is trading down by 25 points. BSE Mid cap and BSE Small cap indices are trading lower by 0.4% and 0.3% respectively. The rupee is trading at 56.06 to the US dollar.

Energy stocks have been trading mixed with Chennai Petroleum and Oil and Natural Gas Corporation Ltd. (ONGC) leading the gains and Oil India Ltd and Bharat Petroleum Corporation Ltd. (BPCL) trading the weakest. Hindustan Petroleum Corporation Limited (HPCL) has announced results for the quarter ending March 31, 2012 (4QFY12). The company reported more than fourfold jump in its bottomline on account of cash compensation from the Government for losses on the sale of Petroleum products that took care of 60% of the under recovery losses. The company received compensation amount worth Rs 183 bn and Rs 121 bn from the Government and upstream segment respectively. For the full fiscal year (FY12), the bottomline registered a decline of 40% YoY. This was mainly on account of an increase in interest costs (up 140% YoY) due to delay in under recovery compensation. In FY12, the domestic sales volumes of petroleum products were at all time high and registered an increase of 7.9% YoY (the highest growth in the industry). The total crude thruput at Mumbai and Visakh refineries was up 9.8% YoY in FY12 and gross refining margins (GRMs) for the year stood at US$ 2.89 per barrel. The stock was trading in the red.

Steel stocks have been trading mainly in the red with Tata Sponge and Tayo Rolls leading the pack of losers. Steel Authority of India ltd. (SAIL) has announced its results for quarter ending March 31, 2012 (4QFY12). The company has reported a 3% year on year (YoY) growth in the bottomline during the quarter. The net profits for full year declined by 28% YoY. The decline was on account of high costs of coking coal (key input material) and adverse exchange rate movements (adverse impact of Rs 9 bn). The costs of coking coal were up by 35% YoY. The input costs were also compounded by the volatility in rupee dollar exchange rate. The net sales for the company registered a growth of 12.2% YoY during the quarter. As per the management, the current fiscal year has started on a positive note for the company and the outlook is bright. The company will be focusing on finishing ongoing modernization and expansion projects to match up the projected growth in steel demand during the 12th Plan period and beyond. The stock was trading in the red.