Markets at low point of the day on rising global oil prices concern

Indian equity markets extended early losses and currently trading near low point of the day as high global oil prices refreshed concerns about inflation in the country as India imports about 80% of its oil consumption. The BSE Sensex fell more than 1%, extending last week's 2 percent decline, while Nifty trading at day’s low. On sectoral front profit booking in rate sensitive’s, capital goods and metal sectors kept the market deep in the red. Only FMCG stocks were supporting the markets. Meanwhile, ICICI Bank and bigger rival SBI led the losers on worry that price pressures could make it difficult for the RBI to ease interest rates. On the global front, Asian shares crept mixed on Monday on rising oil prices concerns.  Back home, the market breadth favoring the negative trend; there were 667 shares on the gaining side against 1,746 shares on the losing side while 104 shares remained unchanged.

The BSE Sensex is currently trading at 17,695.92, down by 227.57 points or 1.27%. The index has touched a high and a low of 17,975.19 and 17,694.97 respectively. There were 7 stocks advancing against 23 declining ones on the index. The broader indices too edged lower in-line with frontline indices; the BSE Mid cap index was down by 2.05% while, Small cap index was down by 1.89%.

Realty down by 4.11%, CG down by 3.87%, Metal down by 3.29%, Power down by 3.25% and Bankex down by 2.32% were the top losers on the index. On the flip side, defensive FMCG space up by 0.75% was the lone gainer on the index.

The top gainers on the Sensex were Cipla up by 1.53%, ITC up by 1.05%, HUL up by 0.82%, Bharti Airtel up by 0.80% and HDFC Bank up by 0.29%.

On the flip side, BHEL down by 5.59%, DLF down by 4.14%, Jindal Steel down by 4.10%, Hindalco Industries down by 4.09% and L&T down by 3.83% were the top losers on the index.

Meanwhile, profits of corporate India are expected to rise by 9.4% in the March quarter of 2012, as per data released by the Centre for Monitoring Indian Economy (CMIE). The banking sector is likely to be the main driver of this profit growth seeing a rise of 42.1% in net profit.

Indian corporates had incurred huge forex losses in the September and the December 2011 quarters because of a steep depreciation of the Indian rupee. However, the rupee is expected to appreciate in the March 2012 quarter, along with a moderation in input price inflation, which will pull up profits in the forthcoming quarter.

Profits for the entire financial year, however, are expected to be 9.5% lower than the year ago level. The net profit margin is also likely to drop to a decade low of 6%. The growth in sales though is expected to average at 22.2% for FY’12, which will come on top of an equally strong growth of 20.2% in FY’11. The growth in sales will be mainly driven by high unit realization.

The benefits of the increased prices are expected to accrue in the second half of the year as well, mainly on the back of increase in prices made by the companies in the first half of FY’12, due to rising costs of imported commodities such as crude oil, LNG, natural rubber and gold.

With interest rates remaining firm, the banking sector is also expected to witness a robust growth, and likely to continue in the second half as well. The RBI to combat inflation hiked interest rates 13 times since March 2010.

The S&P CNX Nifty is currently trading lower by 72.75 at 5,356.55. The index has touched a high and a low of 5,449.80 and 5,354.85 respectively. There were 10 stocks advancing against 39 declines and one remained unchanged on the index.

The top gainers of the Nifty were BPCL up by 2.61%, Cipla up by 1.55%, ITC up by 1.10%, Bharti Airtel up by 1.05% and HUL up by 0.66%.

Sesa Goa down by 10.08%, BHEL down by 5.10%, IDFC down by 4.30%, Hindalco down by 4.12% and RPower down by 4.11%, were the major losers on the index.

Asian equity indices were trading mixed; Shanghai Composite up by 1.09%, Hang Seng added 0.37% and KLSE Composite gained 0.18%. On the flip side, Nikkei 225 down by 0.14%, Jakarta Composite declined by 0.99%, Straits Times shed 0.18% and Seoul Composite plunged 1.42%. 

However, stock markets in Taiwan remained closed on Monday on account of Peace Memorial Day holiday.