Tuesday April 24, 03:30 PM
Bulls party! |
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By Equitymaster.com
Though still well into the positive, the markets shed some gains in the final trading hour. However, the close was well above yesterday's levels. While banking, auto and FMCG stocks found favour with the investors, select software and pharma stocks succumbed to selling pressure. As regards global markets, while the Asian indices closed a mixed bag, the European indices are trading lower currently.
The BSE Sensex closed at 14,137 (up 209 points) while the NSE Nifty closed at 4,142 (up 57 points). The rupee was trading at 41.17 to the dollar.
The RBI's monetary policy had an important bearing on the markets today. The markets opened the day's proceedings marginally above breakeven. However, post noon and more importantly post the release of the monetary policy, the indices witnessed a strong resurgence. The RBI's stance to leave the CRR, SLR and repo rates unchanged went down well with the investors and led to the strong rally on the bourses with the indices far surpassing yesterday's levels. The overall market breadth was positive with gainers outnumbering losers by a ratio of 2.8 to 1 on the Sensex. SBI (up 7%), Ambuja Cements and ICICI Bank (ICBK.BO, news) (each up 4%) emerged as the top gainers on the Sensex today. The BSE Bankex gained 4% today.
Banking stocks closed firm today on the back of a favourable monetary policy with the key gainers being OBC (up 9%), SBI (7%) and Bank of Baroda (6%). The RBI's macroeconomic review released yesterday has estimated the country's real GDP growth to have accelerated from 9% in FY06 to 9.2% in FY07. The acceleration in growth during FY07 was driven by the continued momentum in the services (growth 10.7% YoY) and the manufacturing sector (11.1% YoY), both of which are expected to record double-digit growth going forward. The growth in agriculture and allied activities growth, however, slowed down from 6.0% in FY06 to 2.7% in FY07. Non-food credit expanded by 28% YoY as compared to 32% in FY06 supported by sharp growth in deposits (23% YoY against 18% in FY06).
According to a leading business daily, bulk cargo freight cost has increased significantly due to shortage of 'panamax' and 'handymax' size vessels in the market. The vessel shortage is mainly attributed to congestion at the Australian coal port Newcastle, according to industry sources. Currently, more than 70 ships are waiting at Newcastle, the world's biggest coal export terminal, which handles over 85 million tonnes of coal a year, with the waiting time for ships being around 30 days. While this development is positive for shipping companies, domestic iron ore producers, which have been affected by the Rs 300 per tonne export levy in the Union Budget, have been further burdened with the increase in freight cost. Both Shipping Corporation (up 5%) and G.E. Shipping (1%) closed firm.
After closing nearly 6% higher yesterday, Exide, India's largest storage battery manufacturer, closed 3% lower today. Exide has put up yet another impressive performance for the quarter ended March 2007. Riding on the back of robust auto numbers, the bottomline of the company for 4QFY07 has grown by an impressive 49% YoY on the back of a strong 36% topline growth. Although operating margins have shrunk marginally by 30 basis points, strong growth in other income and a benign depreciation charge has ensured that growth in bottomline remained higher than the topline. The company's performance during the full fiscal FY07 has been even more impressive as it has reported a strong 54% YoY growth in bottomline on the back of a 35% YoY growth in topline. Operating margins have also shown a marginal improvement of 50 basis points. As regards its peers while NRB Bearings (NBEA.BO, news) (up 7%) found favour, MICO (down 1%) closed weak.
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