Markets close firm ahead of Fed policy

Wed, 3 Nov Closing

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   Pre-Open   

   09:30 am   

   11:30 am   

   01:30 pm   

Markets remained in the positive territory, although off the day's highs during the final hours of trade. The Sensex gained around 120 points (up 0.6%), NSE Nifty closed 42 points up (0.7%). BSE Mid cap and small cap indices also had a good showing today and closed up 0.6% and 0.7% respectively.

Global stocks hit a new two-year high today, while emerging equities rose to their highest levels since mid-2008. Investors anticipated that further monetary easing from the Fed would support the global economy. Sentiments in Asia were positive, with Hong Kong and Singapore ending the day on a firm note. China, however, ended in the red, while Japan remained closed. Major markets in Europe were all trading in the positive territory at the time of writing. The rupee was placed at Rs 44.3 against the dollar.

IT stocks closed strong with Patni Computers leading the gains. 3i Infotech announced its September quarter results today. The company reported a 1% QoQ growth in topline and 5% QoQ growth in net profits for the quarter. The modest growth in topline was caused by an 8% QoQ growth in the IT solutions business but this was offset by the 11% QoQ decline in the IT transaction services business (BPO). The decline in this business was mainly due to a decline in volumes in US and other developed markets seen during the quarter. 3i Infotech's operating margins improved marginally by 0.7% QoQ during the quarter to 20.1%. This was on account of lower operating costs (as percentage of total sales). Profits grew by a modest 5%, due to higher operating margins, and lower tax outlay. However, other income fell by 45% during the quarter. Net margins stood at around 10%. This is expected to be within this range for the rest of the year.

Havells India also announced its September quarter results. The company reported a 17% growth in topline and an 8% growth in bottomline on a YoY basis. Most of its segments performed well with the exception of switchgears. However, the major contribution to the topline growth came from the cables and wires segment, which contributed to nearly half of the 17% growth in sales, on better realisations. Despite a good topline performance, operating margins took a hit. This was to the tune of 1.3%. Thus, growth in operating profits came in at just 5% YoY. The decline in margins was attributed mainly to rise in raw material expenses, which the company was not able to fully pass on to consumers. The growth in net profits, came in at 8%, mainly due to lower tax rates.