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Indian markets trade in the red
Mon, 23 Jun 11:30 am

After opening firm; the benchmark Indian Indices have given up their early morning gains and are trading in the red. Among the sectoral indices Auto stocks are leading the gainers while FMCG and IT stocks are leading the losers.

The BSE Sensex is trading down 70 points and the NSE-Nifty is trading down 25 points. The BSE Mid Cap index is trading up 0.5%, while the BSE Small Cap index is trading up 0.4% today. The rupee is trading at 60.2 to the US dollar.

Most Software stocks are trading lower today. Infosys and Wipro are leading the losers. India's second largest software firm Infosys is a front runner for a large software contract from the US government. The US treasury office is likely to award 3 software deals worth US$ 1.3 bn this year and Infosys is seen as the front runner for one of them. The size of the US treasury office deal is estimated to be about US$ 400 m. The company is also in contention for the other two deals as well which are likely to be awarded this year. They pertain to the US Department of Work and Pensions (US$ 500 m) and the US patent office (US$ 400 m). The other Indian IT companies in the race include TCS, Wipro and HCL Technologies. Infosys is trading down 1.8% today.

Mining stocks are trading mixed today. While Sesa Sterlite is trading firm, Ashapura Minechem is trading weak. As per a leading business daily, the government which wanted to divest its residual stake in Hindustan Zinc may choose an offer for sale (OFS) route. This route was opened last week by capital market regulator SEBI for a non-promoter shareholder that has over 10% stake in a public limited company. Anil Agarwal's Vedanta group holds 64.92% stake in Hindustan Zinc, while the government holds 29.54% as a non-promoter entity. Vedanta Group has earlier offered to purchase the government's entire residual stake in the company. However, the latter was reluctant to enter in to negotiation on account of pricing mechanism which is difficult to justify when there is only two parties to the deal, the buyer and seller. Hence the best to avoid any future ambiguity was to sell through auction route. Vedanta Group will participate in to the deal regardless of the divesting route and may get in to bidding war. Hindustan Zinc is trading up 1% today.

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