Markets tad lower in noon trade, SBI slips 3%
Benchmark Indices are trading on a subdued note in noon trade on Friday, amid weak Asian cues, weighed down by profit taking in rate-sensitive shares.
By 1300, Sensex plunged by 60 points at 17,501, and the Nifty down 21 points at 5,302 levels.
On the global front, Asian shares snapped a four-day rally on Friday and extended losses after China's July trade data fell far short of expectations, casting doubts on whether the sputtering global economy will regain traction any time soon. Hang Seng, Nikkei, Strait Times and Shanghai have declined between 0.1-1%.
Back home, BSE Consumer Durable, Auto, Bankex, Realty, Capital Goods, Power, PSU and Metal indices have plunged between 1-2%. However, IT, FMCG and Oil & Gas sectors are trading marginally in green zone.
SBI is the top Sensex loser, down over 3% after India’s largest bank said its net non-performing assets (NPAs) surged 28% to Rs 20,321 crore for the quarter ended June 2012 from Rs 15,818 crore at the end of March 2012. They were Rs 12,436 crore at the end of June quarter last fiscal. The gross NPA rose to 4.99% in Q1FY13 from 4.44% in Q4FY12. Meanwhile, UBS downgraded State Bank of India to "sell" from "buy", saying a weak monsoon would add to its "already high" non-performing loans. Other banking and financial shares like ICICI Bank, HDFC Bank and HDFC have declined by nearly 1%.
Auto shares like Tata Motors, Hero Moto, Bajaj Auto and M&M have slipped between 1-3%. Tata Motors has extended yesterday’s losses after reporting 12.26% increase in net profits for the first quarter ended June 30, 2012 at Rs 2,244.91 crore.
Shares of capital goods companies have too have extended Thursday losses after capital goods sector witnessed a degrowth of negative 27.9% in June 2012 versus positive 38.7% recorded in June 2011. The manufacturing, which constitutes about 76% of industrial production, contracted to -3.2% in June 2012 from 2.5% in May 2012 and 10% in June 2011.
Meanwhile, the index of industrial production (IIP), a key measure of industrial output, fell 1.8% in June 2012 from a year earlier, while it’s much lower than 2.4% growth reported in the month of May. Analysts expected a 1% growth for June. BHEL and L&T have declined by almost 1%.
Other notable losers include Tata Steel, Coal India, Bharti Airtel, JSPL and Dr Reddy’s Lab.
On the gaining side, FMCG shares like HUL and ITC have gained by 1% each. Shares of fast moving consumer goods (FMCG) companies continue at their upward march. The FMCG companies reported a strong an average 16% year-on-year growth in revenue for the June quarter, as the demand for daily-use items remained buoyant despite inflationary pressure.
The aggregate net profit of ten FMCG companies so far announced their June quarter results have posted an average 37% growth in net profit at Rs 3,627 crore over the previous year. On an average, most companies saw their operating margins grow 100 to 160 basis points during the quarter, due to some softening in commodity prices.
Among other shares, Wockhardt Limited is trading higher by 3% at Rs 1,191, also its new high on the Bombay Stock Exchange. The stock has rallied 18% in past one week as compared to 2% rise in benchmark Sensex and a marginal 0.37% gain in healthcare sector index after the announcement of June quarter results.
Meanwhile, BSE Midcap index has slipped by 0.20% whereas BSE Smallcap index is almost flat. The market breadth remains weak with 1,389 shares declining and 1,066 shares advancing.
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