Indian share markets open flat

Fri, 9 Nov 09:30 am

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Barring Taiwan (up 0.3%) and China (up 0.2%), all major Asian stock markets have opened the day on a weak note with stock markets in Japan (down 0.8%), Hong Kong (down 0.5%) and South Korea (down 0.6%) leading the losses in the region. However, the Indian share markets have opened the day on a flat note with a positive bias. The sectoral indices are trading mixed with stocks in the power and consumer durables space leading the gains. But stocks in the software and capital goods sector were facing selling pressure.

The Sensex today is up by around 21 points (0.1%), while the NSE-Nifty is up by around 1 point (0.0%). Mid and small cap stocks are also trading in the green with the BSE Mid Cap and BSE Small Cap indices up by around 0.3% and 0.6% respectively. The rupee is trading at Rs 54.31 to the US dollar.

Energy stocks have opened the day on a mixed note with Chennai Petroleum Corporation Ltd. and Petronet LNG leading the gains. However, Gas Authority of India Ltd (GAIL) and Gujarat State Petronet Ltd (GSPL) are facing selling pressure. Oil and Natural Gas Corporation Ltd (ONGC) has announced its results for the second quarter of financial year 2013 (2QFY13). The company's revenues for the quarter were down by 12.5% on a year on year (YoY) basis. The crude oil production for the quarter declined by 4.6% YoY, while gas output was down by a marginal 0.5% YoY. ONGC has reported a 32% YoY decline in the bottomline for the quarter. The decline has been the steepest in nearly four years. The profits were down mainly due to the higher subsidy outgo (up by 116% YoY) for the quarter. The company has issued a warning that if the trend of rising fuel subsidy outgo continues, its cash reserves will be eroded by almost two-thirds. ONGC's gross realization in the quarter under review stood at US$109.85 per barrel. However, it had to give a discount of US$63 per barrel, leading to a net realization of only US$46.8 per barrel. The net realizations were much lower than US$56 per barrel that the oil ministry had promised the company to help it sustain its operations. As per the management, any realization less than US$60 per barrel is not sustainable for the company since cost of production is increasing. The management has given guidance that the crude oil production is likely to rise to 29.1 million tonnes (MT) next fiscal from current year target of 27 MT. Similarly, gas output is expected to rise to 26.45 MT in 2013-14 from 25.73 MT in the current year.

Auto stocks have opened the day on a mixed note with Ashok Leyland and Bajaj Auto Ltd leading the pack of gainers. However, Eicher Motors Ltd and Hero MotoCorp Ltd facing maximum selling pressure. The leading commercial vehicle maker Ashok Leyland has announced its results for the second quarter of financial year 2013 (2QFY13). The company has reported a 6 % year on year (YoY) increase in the total revenues for the quarter. The growth in the topline was affected due to an overall slump in the volumes in the medium and commercial vehicle segment. Higher interest rates are one of the reasons for a low demand in the segment. The net profits for the quarter were down by 8% YoY. The decline was mainly on account of higher interest costs and depreciation expenses. As per the management, the company will not hold back on investments in new products. Over the first half of this financial year, the company has gained 3% in the overall market share which now stands at 26%.