Realty, power buck the weak trend

Thu, 31 May 01:30 pm

   Previous Close   

   Pre-Open   

   09:30 am   

   11:30 am   

   Closing   

The Indian equity markets continued to languish in the red during the previous hour of trade. Barring stocks from the realty and power spaces, selling activity is being witnessed across the board. Stocks from auto, capital goods and oil & gas sectors are amongst the top underperformers at the moment.

The Sensex today is trading lower by about 150 points, while the NSE-Nifty is trading lower by about 45 points. The BSE Mid cap and BSE Small cap indices are trading lower by 0.3% and 0.6% respectively. The rupee is trading at 56.44 to the US dollar.

Stocks of real estate and construction companies are trading mixed with Gammon India, Sobha Developers and Pratibha Industries trading weak while Unity Infrastructure Projects, IVRCL and GMR Infra are trading firm. A leading business daily has reported that Hindustan Construction Company (HCC) is looking at monetizing some of its non-core assets. It may be noted that during the month of March this year, HCC had gone in for restructuring its debt, which amounted to Rs 42 bn at the end of FY12. The latest development is that the company has sold about 20 acres of land along the Mumbai-Pune highway for a sum of Rs 270 m. this deal is believed to mark the beginning of its monetizing non-core asset strategy. Further, it is reported that the company may sell another 80 acres of land at the same location as well as some residential apartments it owns in New Delhi, Kolkata and Lucknow. Apart from selling non-core assets, the company is also focusing on improving its cash position by trying to speed up the collection of dues from its clients.

GDP numbers for the quarter ended March 2012 were announced today. It is reported that the Indian economy grew at a pace of 5.3% during the quarter, which is the slowest quarterly growth in three years. During the preceding quarter (3QFY12), the figure stood at 6.1%. The key reason for the slow growth was a poor industrial performance. The manufacturing sector contracted by 0.3% YoY as compared to 7.3% last year. The agriculture sector on the other hand grew by 1.7% (7.5% during corresponding period last year). The mining sector however reported a growth figure of 4.3% as compared. The same figure last year stood at 0.6%. The growth in the services sector remained strong, growing by 10% (similar to last year).

With the full year numbers being reported, experts are pegging the growth figure for the full year at 6.5%, down by 0.4% from earlier estimates. As per the Central Statistics Office, the downward revision in GDP growth rate for FY12 is due to a lower performance (than anticipated) in manufacturing as well as the trade, hotels, transport and communications sectors combined.