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Global markets, IT hiring & more...

Mar 7, 2008

  • Global markets continue to reel in the red on account of recession fears in the US, continued surge in global commodity prices and their consequent impact on inflation. The US markets yesterday closed deep in the red and the cues have been well taken by the Asian indices. Currently, while Hong Kong, Japan and Singapore markets are down around 3% apiece, China and Taiwan are down almost 2% each. While stocks across the board are showing no signs of recuperating their losses, that fact that crude prices are rising and so are those of key metals like copper and steel, investors around the world have been on tenterhooks with regards to a higher inflation scenario. And there is no respite on the food front as well.

    As for the Indian stock market, there is no change in sentiment either. With the Union Budget now behind us, participants are seemingly waiting for the next trigger that might possibly come from the quarterly result announcements starting next month. In the meanwhile, vibes emanating from companies impacted by a US slowdown (like software, pharma and auto ancillary) or those affected by a slowing industrial growth will influence market movements.

  • The impact of a possible slowdown in the US economy is likely to be seen in campus hiring, as reported by a leading business daily today. In fact, the campus recruitments by Indian technology companies (both in the IT and BPO spaces) is expected to decline by around 38% during 2008, with the problem aggravating the next six months. The report also states that some companies have already delayed joining dates of new hires by 2 to 3 months. These issues seem the after effects of some companies announcing delays in projects due to a few clients slowing down on their orders.

    A case in point is TCS, India's (and Asia's) largest technology company, which recently talked about two of its key clients going slower on their orders. While leading technology companies (like TCS, Infosys and Satyam) are yet to ring alarm bells on project delays and hiring, uncertainty about the US economic performance is something that is keeping their managements on tenterhooks. However, one positive fallout of this slowdown in hiring will be that attrition in these companies might come down after reaching the high teens in recent quarters.

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