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Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
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Energy, autos keep indices afloat 
(Fri, 12 Mar 11:30 am) 
 
The Indian markets pared some of their opening gains during the previous two hours of trade. Currently, selling activity from sectors like capital goods, IT, power and consumer durables are dragging the indices down. Nevertheless, oil & gas, auto, metal, healthcare and banking stocks are finding favour.

The BSE-Sensex and the NSE-Nifty are currently trading marginally higher by around 21 points and 8 points respectively. Stocks from the midcap and small cap spaces are trading in the green, with the BSE-Midcap and the BSE-Smallcap indices trading higher by 0.2% and 0.3% respectively. The rupee is trading at 45.45 to the US dollar.

According to a leading business daily, India’s largest private sector lender ICICI Bank has decided to withdraw its aggressive lifetime free credit cards scheme. As per the new business strategy, the bank will charge some annual fee from new credit card customers. It may be noted that the bank introduced the lifetime free cards scheme in 2005 in order to aggressively win market share. Other banks followed suit and waived fees from their credit cards. However, the financial recession resulted in huge credit card NPAs (Non-performing assets) as customers defaulted on their credit card payments. The percentage of NPAs increased drastically from around 5-8% in FY08 to as high as 20% in FY09.

Nevertheless, it appears that banks have learnt their lesson. ICICI Bank as well as its public sector peer SBI have stopped dolling out credit cards for free. Banks have started focusing on premium segments which have lower propensity to default as compared to the mass segment. We believe that this is a prudent move for ICICI Bank whose gross NPAs in absolute terms have nearly doubled in the past 12 months.

Mahindra Satyam has informed BSE that it has signed a new four year offshoring contract with KMD, one of the largest IT company in Denmark. This deal worth US$ 48 m (Rs 2.18 bn) requires Mahindra Satyam to provide services such as application development, testing and application support particularly in SAP domain. It may be noted that this is an extension of a previous contract which was due to expire this year. Mahindra Satyam despite its maligned reputation on account of huge financial scam has been selected for this project on back of its outstanding competencies in the area and the quality of work it already delivered to the client. We believe that while matters like financial transparency and ongoing law-suits still becloud Mahindra Satyam’s future, its capabilities as a global software service provider may continue to fetch the company more business.

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Jul 28, 2017 12:21 PM

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