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Fri, 23 Jul 09:30 am

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The Indian markets have started today's session on a positive note. The benchmark indices opened above the breakeven mark, and soon moved further into the positive territory. They have managed to hold on to their gains since then. Other key Asian markets are in the green with Japan (up 1.8%) leading the pack of gainers. The US markets closed higher by 2% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading strong with software and auto majors attracting investors' interest. The BSE-Sensex is trading higher by around 65 points, while the NSE-Nifty is up by about 20 points. Buying interest is also being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.4% and 0.3% respectively. The rupee is trading at 46.94 to the US dollar.

Banking stocks have opened the day on a positive note. Gainers here include ICICI Bank and SBI. Yes Bank has announced its 1QFY11 results. It witnessed a net interest income growth of 67% YoY during the quarter on the back of a 56% YoY growth in advances. The bank expanded its loan book by 107% YoY. However, most of the incremental lending during the quarter was lumpy as lending was concentrated to telecom companies (for 3G licenses) and some retail assets. Other income fell by 6% YoY during the period due to lower treasury gains. Net interest margin remained stable at 3.1% at the end of 1QFY11. The bank's bottomline grew by 56% YoY during the quarter due to lower provisioning and higher operating leverage. Capital adequacy ratio stood at a comfortable at 16.6%, while gross NPA was at 0.04%.

Software stocks have opened the day on a positive note. Gainers here include Wipro and Infosys. As per a leading business daily, Bharti Airtel has shortlisted IBM, HP, Accenture, Wipro and Tech Mahindra for its IT outsourcing contract worth more than US$ 1 bn, spread across 15 geographies in Africa. Bharti Airtel had invited request for information in April-end to outsource operations for assets it acquired from Kuwait's Zain Telecom. This suggests that Bharti is looking to de-risk by exploring vendors other than its existing partner IBM. However, it will have to keep costs in mind given the degree of financial leverage it has currently. Bharti Airtel's 10-year deal with IBM was originally estimated to be worth US$ 750 m but it has already crossed US$ 3 bn. It may be noted that outsourcing all key operations is a concept pioneered by Bharti Airtel in India and is the key to its low cost, high usage business model.