The Indian markets have started todayís session on a negative note. The benchmark indices opened below the breakeven mark, moved into the green but soon dived back into the negative in line with rest of Asia. Other key Asian markets are trading in the red with Japan (down 1%) leading the pack of losers. The US markets closed higher by 0.1% yesterday.
Currently in India, heavyweights from the BSE-Sensex are trading weak with auto and banking majors facing the brunt of selling activity. The BSE-Sensex is trading lower by around 70 points, while the NSE-Nifty is down by about 25 points. However, buying interest is being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.1% and 0.3% respectively. The rupee is trading at 44.66 to the US dollar.
Software stocks are trading mixed. While gains are seen in Wipro and TCS, others like Infosys and Tech Mahindra are trading weak. Infosys announced its full year FY10 results a short while ago. The company has recorded a 5% YoY growth in sales during the year, and a similar growth in net profits. The company has recommended a final dividend of Rs 15 per share. As for the current fiscal (FY11), the management expects total income to grow by around 9-11% YoY while it estimates net profits to decline by 2% YoY. This is something the markets have not taken positively, and thus the pressure on the stock price.
Energy stocks have opened the day on a negative note. Losers here include Gujarat Gas and Cairn India. As per a leading business daily, GAIL plans to invest about Rs 150 bn over the next three years in expanding its pipeline network. The new pipelines will connect cities in Uttar Pradesh, Uttarakhand, Punjab and Haryana. This is in anticipation of the robust growth in gas demand in these states. Moreover, the company is expanding its 10,700 km of cross-country pipeline network. It is laying 5,000 km of pipeline to connect gas sources on the western coast to consumption centres in the north by 2013. It is also laying pipelines to connect to Bangalore, Mangalore and Kochi. The company is also in talks with Engineers India to set up a joint venture to sell compressed natural gas to automobiles and piped natural gas to households in cities. In our view, given GAILís strong track record of implementing projects and the strong demand for natural gas, the capacity expansion is a positive development.