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Metal stocks drag indices lower
Tue, 26 Oct 01:30 pm

After hovering around the dotted line since morning the benchmark indices slipped into the negative territory at noon. European markets have also opened on a negative note following the Asian trend. Currently, metal, banks and oil & gas stocks are under selling pressure whereas automobile and power stocks have showed some gains.

Currently, the BSE-Sensex is trading lower by 75 points, while the NSE-Nifty is down by about 20 points. The BSE-Midcap index is also trading lower by 0.3% while the BSE-Smallcap index is trading marginally higher by 0.3%. The rupee is trading at 44.42 to the US dollar.

The Indian Finance Minister expects the economy to grow at 8.25-8.75% in the current fiscal and to regain the pre-crisis GDP growth level of 9% average growth soon. Robust increase in gross tax revenue, higher than anticipated proceeds from the 3G and broadband spectrum sale as also the proceeds from disinvestment of PSUs are expected to help meet the fiscal deficit target.

Engineering stocks are currently trading weak led by Lakshmi Machine Works, Bharat Bijlee and Jyoti Structures. Stocks of sector heavyweights such as BHEL, Siemens, L&T and Suzlon are in the red as well. Engineering major Crompton Greaves declared its results for the quarter ended September 2010 recently. The company posted a consolidated revenue and profits growth of 10% YoY and 11% YoY respectively during the quarter. The growth in revenue was led by the company's 'consumer products', which grew by 24% YoY.

As for the largest business - the power systems segment - revenues grew by 7% YoY. This segment contributed to nearly 65% of the company's revenues as compared to 65% during 2QFY10. The company performed decently at the operating level with its margins contracting by 0.1% YoY to 13.9%. On the back of the topline growth as well as substantially higher other income, profits increased by 11% YoY during the quarter. As for the performance during 1HFY11, Crompton Greaves' revenues and profits were up by 7% YoY and 14% YoY.

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