Metal stocks provide shine

Fri, 4 Nov 01:30 pm

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The Indian stock market shed some of the morning session gains during the last two hours of trade, but are still trading firm. Except for healthcare, all sectoral indices are in the red. Stocks from the metal, realty, capital goods and banking sectors are leading the pack of gainers.

The BSE-Sensex is trading up by 93 points while NSE-Nifty is trading 22 points above yesterday's closing. The BSE Mid Cap and BSE Small Cap indices are trading up by 0.8% and 0.6% respectively. The rupee is trading at 49.14 to the US dollar.

Energy stocks have been trading mixed with Essar Oil, Mangalore Refinery and Petrochemicals Ltd (MRPL) and Petronet LNG leading the pack of gainers. However, Gujarat Gas, Gas Authority of India Ltd (GAIL) and Reliance Industries are trading weak. Gujarat Gas has announced its results for the third quarter of its financial year 2011 (3QCY11). The company has reported a 42.7% YoY growth in bottomline while the total income has registered an increase of 29.8% YoY. The operating profit margins and net profit margins for the quarter stood at 18% and 12% respectively. During the quarter, the company achieved 8% QoQ growth in volumes of gas sold. The growth in sales was also on account of increase in selling prices in the Industrial segment and healthy conversion numbers for CNG conversion (8400 conversions during the quarter), leading to 16% YoY growth in CNG sales volumes. The sales in the Domestic segment were up 9% YoY as over 4,900 households were connected to the gas supply during the quarter. The management said that adverse impact of a depreciating rupee (versus dollar) offset the hike in gas prices during the quarter. Going forward, high gas costs remain a concern due to increasing share of costlier imported gas. The company's application for distribution of gas is still pending with the Petroleum and Natural Gas Regulatory Board.

Engineering stocks have been trading mixed as well with Elgi Equipments, Voltas Ltd and Areva T&D leading the pack of gainers. However, Jain Irrigation, Manugraph India and Kalpataru Power are trading weak. As per a reputed financial daily, the Heavy industries ministry has announced that it will seek duty on Chinese and Korean imports to level the field for domestic vendors against cheaper imports. As per the ministry, this would be necessary for the domestic equipment manufacturers to raise the capacities. Indian companies that pay local manufacturing taxes have been demanding a 14% duty on imported equipments, especially on those from China as yuan is artificially pegged that puts local players at a disadvantage. However, the power companies have been opposing the move.