Cautious undertone on weak global cues

Wed, 3 Aug Closing

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Few disappointing sets of results, clouded global economic outlook and concerns over a hiring slowdown in India left Indian stock markets little to cheer about today. The Indian indices had a weak outing as relentless selling pressure led the indices to languish in the red throughout the day. There was no respite in the final trading hour as well and the indices closed well below the dotted line. While the BSE-Sensex closed lower by around 169 points (down 1%), the NSE-Nifty closed lower by around 52 points (down 1%). The BSE-Midcap and BSE-Small cap were not spared either as they as they closed lower by 0.5% each. Barring few FMCG and metal stocks, losses were seen across sectors.

As regards global markets, Asian indices closed weak today while European indices have also opened in the red. The rupee was trading at Rs 44.32 to the dollar at the time of writing.

ABB India has bagged orders worth Rs 160 m to supply turnkey power and automation solution for three photovoltaic solar plants with a combined capacity of 11 megawatts in India. The orders comprise of two 5 MW photovoltaic solar power plants and one 1MW photovoltaic solar power plant. When completed in October this year, the plant will have an annual generating capacity of up to 17.6 Gigawatt-hours of electricity. ABB had received order inflows to the tune of Rs 16.9 bn in 1QCY11 while its order backlog at the end of the quarter stood at Rs 83 bn.

Along with Areva and Siemens, ABB is one of the top multinational capital equipment brands in India. Over the last year or so, we have seen a consistent rise in prices of commodities such as steel, copper and aluminum from their lows, which are the key raw materials for ABB. While the company has been able to manage these price rises in the past, the highly competitive environment is inhibiting the company's ability to pass on cost increases as easily.

Yes Bank declared its results for the first quarter of FY12 (1QFY12). The bank has reported a 35% YoY and 38% YoY growth in net interest income and net profits respectively. Net interest margin came in marginally lower at 2.8% (3.1% in 1QFY11) due to pressure on interest costs. The bottomline grew 38% YoY in 1QFY12 thanks to write back of provisioning and higher operating leverage. While the capital adequacy ratio (CAR) is comfortable at 16.2%, the gross NPA level was also marginal at 0.1% of advances. CASA (current and savings accounts) as a proportion of total deposits remained stable at 10.9% at the end of June 2011. The bank has set a target of achieving 25% CASA by FY12 and 40% by FY15.