Indian indices, after opening the day in the red, have moved into the positive territory on the back of buying interest in heavy weights over the previous two hours of trade. Stocks from the metal and consumer durables space are trading firm, while stocks from the oil & gas and FMCG space are trading weak.
The BSE-Sensex is up by 34 points while NSE-Nifty is trading 19 points above the dotted line. BSE Midcap index is up by 0.8% while BSE Small cap index is trading 0.9% above yesterday's closing. The rupee is trading at 45.40 to the US dollar.
Steel stocks are trading firm led by SAIL and Adhunik Metaliks. However, Bhushan Steel and ISPAT Industries are trading weak. With an aim to diversify its global presence, SAIL is planning to set up a 3 mtpa plant in Mongolia at an investment of around Rs 150 bn. As Mongolia has abundant coking coal and iron ore deposits, the proposed plant will be assured of raw material linkages, a primary determinant for setting up a steel plant. SAIL has already sent a delegation to Mongolia for a primary check and an agreement to this effect is likely to culminate within the next six months. Apart from Mongolia, SAIL is also in advanced stages of discussion with the Indonesian government to set up a similar facility. It may be noted that SAIL has already embarked on a Rs 700 bn capacity expansion plan to enhance its capacity to 23.4 mtpa from 14.3 mtpa.
IT stocks are trading firm led by Tech Mahindra and Mahindra Satyam. As per a leading financial daily, Infosys Technologies is seeing an increase in budgets across several verticals in Europe as its clients are experiencing an increase in their own demand. Unlike last year when there were budget cuts, the company is seeing an increase of 2-3% in many verticals like financial services, manufacturing and telecom. This has led to increase in local hiring by the company this year. In fact, Infosys plans to hire about 500 people in the next 2-3 years across its sales, consulting and technical teams to add to its 4,000 employees in Europe. Infosys is trying to boost its European business as it seeks to reduce its reliance on the US from where it derives a majority of its revenues. Key European markets for the company include Germany, France, the Nordic countries and the UK.