The Indian markets have started today's session on a volatile note. The benchmark indices opened below the breakeven mark. Although they have tried to cross over into the positive territory since then, they have not managed to stay there for long. Other key Asian markets are in the red with Japan (down 1.6%) leading the pack of losers. The US markets closed lower by 1.1% yesterday.
Currently in India, heavyweights from the BSE-Sensex are trading weak with auto and metal majors facing the brunt of selling activity. The BSE-Sensex is trading lower by around 12 points, while the NSE-Nifty is down by about 6 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 0.2% respectively. The rupee is trading at 45.07 to the US dollar.
Software stocks have opened the day on a positive note. Gainers here include NIIT and Wipro. As per a leading business daily, Wipro has bagged three projects from the governments of Maharashtra, West Bengal and Gujarat for setting up data centers. The Maharashtra project involves commissioning a state data center covering about 3,000 sq feet and managing it for a period of five years. Similarly, the West Bengal project is for designing and building the data center including both the IT and non-IT components and managing it for five years. The Gujarat project is for upgradation and commissioning of the data center. It will also act as a disaster recovery site for four other mini data centers already present in Gujarat. These centers will help citizens file their taxes, access information on public expenditure, lodge complaints etc. Data centers, along with state wide area network and common service centers are part the government's National e-Governance Plan. While financial details of Wipro's orders are not known, in our view, these developments highlight the increasing importance of the Indian IT market in the software giants' overall business.
Engineering stocks have also opened the day on a positive note. Gainers here include Crompton Greaves and Alfa Laval. Crompton Greaves announced its 4QFY10 results. The company has reported a 2% YoY growth in topline during the quarter. It was led by a strong performance from the 'consumer products' business, which recorded a growth of 24% YoY in 4QFY10. Sales of the 'industrial systems' business also saw a good growth of 17% YoY. However, its largest business of 'power systems' registered a topline decline of around 5% YoY during the period. The company's operating margins expanded by 2.7% YoY, as a percentage of sales, due to a big drop in cost of traded goods as also other expenditure. Bottomline grew by 40% YoY during the quarter, excluding extraordinary items, on the back of improved operating margins, lower interest expenses and a lower effective tax rate.