Investors in the equity market in India were in no mood to relent as they continued to pile on the selling pressure right till the end. As a consequence, while the Sensex edged lower by around 250 points (down 1.6%), Nifty suffered a decline of around 80 points. BSE Mid Cap and Small Cap indices too suffered reversals of a similar magnitude as their larger counterparts. Only about three stocks from the Sensex managed to keep their head above water.
Most Asian indices closed lower today with Europe too opening on a negative note. The rupee was trading at Rs 55.9 to the dollar at the time of writing.
It was a combination of bad news that led to today's steep fall in the indices. Right from global cues to domestic factors such as poor GDP numbers to news of delays in the onset of monsoon impacted investor sentiment and forced them to dump their shares. With quite a few dominant brokerages threatening to lower India's GDP growth further in their projections, looks like sentiment is likely to remain subdued. However, it is poor sentiments and excessive overreaction to short term news that create opportunity for patient long term investors. Thus, it is time they start grabbing the same.
TVS Motors, one of India's largest two-wheeler manufacturers, closed lower by 2% on the bourses today. The weakness was due to its poor sales numbers for the month of May. Its total sales volumes are believed to have dipped by more than 5% on a YoY basis. Exports, the saving grace in recent years, also put up a poor performance, falling by 13% over same period last year. Rounding off the weak data was the three-wheeler performance where sales slipped 28% YoY, albeit on a lower base. Clearly, with competition hotting up in the sector, the company seems to be feeling the heat.
Lakshmi Machine Works, India's largest supplier of textile machinery recently announced its fourth quarter and full year FY12 results. For the full year, it reported a 17% drop in net profits over a 17% growth in topline. Profits fell on account of lower operating margins as well as higher onetime tax outgo. Its fourth quarter performance was even worse as profits tumbled more than 84% on the back of a 6% fall in topline. Here too, certain onetime charges hurt the company badly. The company expects to log in a virtually flat growth rate for the current fiscal. This could change however if economic conditions were to improve. The stock closed flat on the bourses today.