After starting the day on a firm note, the Indian stock markets gradually lost steam and ended the day on a flat note. The BSE-Sensex closed lower by about 6 points, while the NSE-Nifty ended lower by about 2 points. While stocks from the metal and information technology spaces were amongst the top losers, those from the engineering and oil & gas spaces were the most preferred by market participants today. The BSE Mid Cap and BSE Small Cap indices ended the day on a flat note as well.
Stock markets in other parts of Asia ended the day on a mixed note with Japan and Hong Kong closing lower by about 0.9% and 0.1% respectively, while China ended higher by about 0.3%. The rupee was trading at Rs 60.7 to the dollar at the time of writing.
Stocks of information technology companies ended the day on a weak note led by Wipro, CMC and Infosys. As reported in the Hindu Business Line, the top software companies are resorting to hiking salaries to retain staff as attrition rates have been on the rise. For example, IT major Infosys witnessed attrition rate as high as 18.7%, most of which was voluntary. The company had a second round of compensation increase - 6 to 7% for its offshore employee and 1 to 2% for its onsite employees - in a nine month period and as such hopes to curb attrition levels. At rival companies Wipro and TCS, salary hikes are expected to occur in the range of 8 to 10%. For Wipro, the reported attrition level stood at about 15% in FY14, while for TCS the figure came in at a much lower 11%. This trend should be a cause of concern for the IT players that are facing issues, given that the business in the US is picking up and as such the requirement for personnel remains high.
Stocks of MNC pharmaceutical companies ended the day on a mixed note with Novartis and Pfizer leading the pack of gains while Abbott India and Merck were amongst the top underperformers. GSK Pharmaceuticals announced its results for the quarter ended March 2014 (1QCY14). The company's revenues declined by 5% YoY during the quarter, largely due to the impact of the new drug pricing policy in the domestic market. At the operating level, profits were lower by 36% YoY as margins contracted to 19.6%, which is lower by 7.7% on a YoY basis. Lower margins were on the back of an increase in overall operating costs. Lower other income coupled with a poor operating performance led to a profit decline of 43% YoY during the quarter. The stock of GSK Pharma ended the day with minor losses.