Markets close flat for the week

Fri, 19 Oct Closing

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Although indices in the equity market of India came off the day's lows during the closing hours, they could not eradicate the losses completely. As a consequence, the markets closed the day substantially in the red. While BSE-Sensex edged lower by around 110 points (down 0.6%), decline on the NSE-Nifty came in at around 34 points. BSE Mid Cap and BSE Small Cap indices also closed lower, down in the region of 0.4% each. Nearly four stocks declined for every one that closed the day in the positive.

Asian markets closed mixed today while Europe is trading mostly in the red currently. The rupee was trading close to the Rs 54 per dollar mark at the time of writing.

As far as we can tell, today's decline cannot be attributed to any significant development of note. There have of course been quite a few results coming out with individual stocks reacting to the same. But the overall trend could be attributed to investors engaging in profit booking and taking some money off the table. This could be good news for the long term investor as it could give him a good chance to scoop up fundamentally good stocks at reasonable valuations. Especially after the quick run up that most stocks saw. With flurry of results expected to pick up next week onwards, more volatility cannot be ruled out.

Petronet LNG has announced its results for the second quarter of financial year 2013(2QFY13). The company reported 21% year on year (YoY) growth in the bottomline and 43% YoY growth in the topline during the quarter. The net profit margins for the quarter stood at 4.1% as compared to 4.9% in the corresponding period same year. The growth in the bottomline was on the back of forex gains of Rs 3.2 bn as compared to losses in 2QFY12. The raw material costs for the quarter were up 47% YoY. The operating margins for the quarter stood at 6.8% versus 8.4% last year. The stock closed higher by 1% on the bourses today.

Zee Entertainment also declared results for second quarter of FY13 (2QFY13) today. The company reported a growth of 33.8% YoY in sales as compared to the same quarter last year. This was led by 33.7% YoY increase in advertising segment and 35.7% YoY increase in subscriptions. Zee was able to achieve such high growth numbers in advertising despite unfavourable economic environment for the media players. However, more investment in content resulted in higher programming and operating costs. Operating expenditure was thus up by 44% YoY and operating profits increased by 7.7% YoY. Depreciation charges went up by 22% YOY during the quarter and interest charges that are negligible jumped by 135% YoY on a smaller base of same quarter last year. Zee was able to report a net profit growth of 17.5% YoY during the quarter on back of good performance at topline level despite higher costs. However, the net profit margins shrank by 2.7% from 22.4% in same quarter last year to 19.7% at present. The stock closed nearly 1% lower today.