Indian indices hit by volatility

Thu, 2 Aug Closing

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Indian equity markets had a volatile trading session today. The indices began the day's proceedings on a firm note although subsequent trading hours saw the indices move deeper into the red. Post noon, buying activity did push the indices towards the dotted line although they failed to break above it. While the Sensex today lower by 33 points, the NSE-Nifty today closed lower by 13 points. The BSE Mid Cap and the BSE Small Cap, however, bucked the trend and closed marginally in the positive. Losses were largely seen in banking and Oil and gas stocks.

As regards global markets, Asian indices closed mixed today while European indices have opened in the green. The rupee was trading at Rs 55.85 to the dollar at the time of writing.

Cement stocks closed mixed today. While Madras Cements and Shree Cement found favour, ACC and Ambuja Cement closed in the red. ACC announced its results for the second quarter ended June 2012(calendar ending company). On a standalone basis, ACC's net sales rose by 15.6% YoY during the quarter ended June 2012. Cement sales volumes rose by 2% from 5.93 m tonnes in 2QCY11 to 6.05 m tonnes in 2QCY12. The balance addition to the topline was due to improvement in cement realisations. On the cost front, total raw material cost (including changes in inventory and purchase of stock-in-trade) increased by 1.2% as a percentage of net sales. The company witnessed an increase in the cost of all major inputs including slag, fly ash and gypsum. On the other hand, power & fuel costs as well as other expenditure declined by 1.9% YoY and 0.7% YoY respectively (as a percentage of net sales). This led to a marginal improvement in operating margins from 22.9% in 2QCY11 to 23.4% in 2QCY12. Improvement in operating margins as well as higher other income resulted in 24.2% YoY rise in net profits. Net margins improved from 14% in 2QCY11 to 15% in 2QCY12.

Rural Electrification Corporation (REC) declared its results for the first quarter of the financial year 2012-13 (1QFY13). Income from operations grew by 30% YoY in 1QFY13, on the back of 24% YoY growth in its advances. Net interest income (NII) also grew at a healthy pace, rising 28% YoY in 1QFY13, despite higher costs of funds. Disbursements grew by 25% YoY, while sanctions grew by 3% YoY in 1QFY13. Net interest margins (NIM) improved by 0.1% to 4.5% in 1QFY13. Bottomline grew by 32% YoY in 1QFY13 on higher other income and NII, and despite higher forex losses. The stock closed higher by 2% today.