All major Asian stock markets have opened the day on a weak note with stock markets in Hong Kong (down 1.6%) and Taiwan (down 1.3%) leading the losses in the region. The Indian equity market indices have also opened the day on a weak note. Stocks in the information technology space are leading the pack of losers following lower than expected first quarter results of IT major Infosys.
The Sensex today is down by around 180 points (1%), while the NSE-Nifty is down by around 52 points (1%). Mid and small cap stocks are also trading in the red with the BSE Mid Cap and BSE Small Cap indices down by around 0.4% and 0.3% respectively. The rupee is trading at Rs 55.60 to the US dollar.
Aluminium stocks have opened the day on a weak note with Hindalco Industries and National Aluminium Company Ltd (Nalco) facing selling pressure. As per a top official of Nalco, the aluminium producer is set to submit a bid this month for developing gold and copper deposits in Afghanistan. The state-run firm will submit the bid in consortium with other public sector undertakings (PSUs) such as Steel Authority of India Ltd (SAIL) and Hindustan Copper. Among private Indian firms, Monnet Ispat & Energy and Jindal Steel & Power have also been shortlisted by the Afghan government for the copper and gold mines. These two private firms have been invited to join the consortium of PSUs, so that a single Indian bid can be submitted. The deposits being examined by the consortium includes gold and copper deposits at Zarkashan in Ghazn, at Badakhshan, and at Herat and Balkhab in Shaida districts of Afghanistan. However, the proposed investments for the same are not announced yet. The consortium of Indian PSUs is among the 25 companies/ consortia from countries such as the US, the UK, Australia, Canada, the UAE, Turkey and Afghanistan that have been shortlisted by the Afghan government in April 2012 for developing its gold and copper mines.
Technology stocks have opened the day on a weak note with Infosys Ltd, HCL Technologies and Wipro leading the losses. Industry major, Infosys Ltd has recently released its first quarter results for the financial year 2012-2013 (1QFY13). The company has reported an 8.6% quarter on quarter (QoQ) growth in its consolidated total revenues. The operating margins declined to 28% as compared to 29.9% seen during the previous quarter (4QFY12). This was on account of an increase in cost of sales as well as in administrative expenses during the quarter (all as a percentage of sales). Weaker operating margins as well as lower other income led to a 1.2% QoQ fall in the net profits of the company. In dollar terms the fall in net profits was even worse. The company reported a 10.2% QoQ decline in net profits in dollar terms. The company's management has also hinted on a slowdown in the IT industry on account of the troubles in the Euro zone as well as the slower growth in the developed markets. The stock has opened the day deep in the red.