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Money Nov 9, 2012

Sensex closes in red; SBI down 4% as NPAs disappoint

By Firstbiz Staff

The Indian markets had a sluggish close to the week with the Sensex closing at 18683.68, 0.86 percent down and the Nifty closing at 5686.25, 0.91 percent down, dragged by dismal earnings of heavyweights including SBI and ONGC.

HSBC yesterday said the Indian economy, which is projected to grow at 5.7 percent this fiscal, is likely to clip at a faster pace next fiscal at 6.9 percent following the recent spate of policy reforms.

The Metal, Capital Goods and Bank stocks dragged the Sensex down today.

Additionally, India Against Corruption leader Arvind Kejriwal today targeted Indian corporate honchos including Mukesh and Anil Ambani and Naresh Goyal, promoter of Jet Airways and said that they have crores hidden away in Swiss bank accounts.

The Metal, Capital Goods and Bank stocks were down today. Reuters

The government today allowed telecommunications companies to raise loans from offshore markets to refinance debt for funding a 2G airwave auction that starts on Monday.

Stocks in news

Shares in Indian Hotels Co Ltd, controlled by the Tata Group, was up 0.25 percent after Orient-Express rejected the Indian company's $1.2 billion unsolicited takeover bid, saying it is too cheap.

ONGC Shares in state-run producer Oil & Natural Gas Corp fall as much as 3 percent a day after posting a bigger-than-expected fall in July-September net profit due to higher subsidies.

United Spirits Limited rose 1.22 percent after British drinks major Diageo said that it would acquire 53.4 percent stake in the company for more than $2 billion.

Tata Steelwas down 3.25 percent after Tata Steel Q2 PAT seen down 6 percent YoY to Rs 200 crore.

SBI was down 3.89 percent after its gross non-performing loans increased to 5.15 percent of total assets at end-September, compared with 4.19 percent a year earlier, even though its net profit rose by 30 percent.

"Asset quality continued to disappoint for SBI. Although NII came a shade below our expectations. However the negative surprise came on the addition to stressed assets. Higher recovery / up-gradation was definitely positive but sustaining this kind of run-rate in future would be difficult, a key risk in our view. We see pressure on the stock in near term and retain ACCUMULATE rating on the stock," said Saday Sinha, Banking Analyst at Kotak Securities.

Ashok Leyland was up 7 percent after the company made announcements of making investments as well as reducing debt by Rs 300 crore.

by Firstbiz Staff

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