Volatility mars Indian indices

Wed, 17 Jul Closing

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Indian equity markets had a volatile trading session today. They began the day's proceedings on a positive note and held on to gains in the morning session. However, the afternoon session saw the indices being pushed into the red on account of selling activity intensifying. But this proved to be short lived as buying resumed to push the indices above the dotted line in the final trading hour. While the BSE-Sensex today closed higher by 98 points, the NSE-Nifty closed higher by 18 points. The BSE Mid Cap and the BSE Small Cap index also did well to notch gains of 0.5% and 0.2% respectively. Gains were largely seen in FMCG and IT stocks, while banking stocks were at the receiving end.

As regards global markets, Asian indices closed mixed today while European indices have opened in the red. The rupee was trading at Rs 59.32 to the dollar at the time of writing.

Automobile stocks closed mixed today. While Ashok Leyland and Bajaj Auto found favour, Mahindra & Mahindra (M&M) and Tata Motors closed in the red. Ashok Leyland announced the first quarter results of financial year 2013-2014 (1QFY14). Net sales fell by 22% YoY in 1QFY14 on account of the sluggish conditions in the MHCV market which resulted in a substantial drop in volumes. Geography wise, the MHCV market in the South witnessed the most drop in volumes, and because Ashok Leyland has a strong presence in this region, it was impacted by the weakness there. Exports also took a hit on account of the steep import duty hike in Sri Lanka. Operating margins plunged by 7% to 1% in 1QFY14 largely on account of the considerable fall in volumes. Because of the poor performance at the operating level and higher interest costs, the company reported a net loss of Rs 1.4 bn for the quarter.

Sintex Industries also announced the first quarter results of financial year 2013-2014 (1QFY14). Consolidated total income increased 4.4% YoY during 1QFY14. Strong performance from prefabricated building systems (+18.7% YoY), overseas custom molding business (+23% YoY) and tanks (+17.9% YoY) drove topline growth. Revenues from monolithic construction and domestic custom molding segment were down by 13.1% YoY and 16.3% YoY respectively. Operating profits declined 9.4% YoY, despite modest top line growth on account of increase in employee cost by 9.7% YoY. Operating margins were also down by 210 bps to 14.3% during the quarter. Net profits declined 0.4% YoY due to sharp rise in interest costs and depreciation charges. Adjusting for gains/losses on forex transactions, net profits declined 33.5% YoY. The stock closed lower by 1% today.