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Profit booking drags indices
Fri, 23 Jul 01:30 pm

Indian indices shed their gains on profit booking in heavy weights during the last two hours of trade. Stocks from consumer durable and capital goods space are trading firm while stocks from the realty and metal space are trading weak.

The BSE-Sensex is trading up by 21 points while NSE-Nifty is trading 5 pints above the dotted line. BSE-Midcap index is trading flat while and BSE-Smallcap index is trading 0.2% below yesterday's closing. The rupee is trading at 47.01 to the US dollar.

IT stocks are currently trading mixed with HCL Tech and Infosys trading firm and TCS and Tech Mahindra trading weak. IT major, Wipro announced its results today. The company has reported a growth of about 4% QoQ in revenues during the quarter. Growth was largely volume driven, with all its segments (except for IT products) reporting an increase in numbers. The company's IT services business, which contributes to nearly 76% of total revenues, reported a 5% QoQ increase. Wipro's IT products business, which forms nearly 11% of total revenues, reported a decline of 6.5% QoQ. Wipro's operating profits increased at a faster pace (7.4% YoY) as compared to the revenues growth, on the back of a 0.8% QoQ expansion in margins, which stood at 22.6% during the quarter ended June 2010.

The company added 4,854 (net employees) during the quarter, taking its total employee strength to 112,925. However, the attrition rate stood at 15.8%, which is a concern for the company. Further, the company's IT services segment added 22 new clients during the quarter, thereby taking the total count of active clients to 858.

Banking stocks are trading mixed with Indusind Bank and Axis Bank trading firm and Bank of India and HDFC Bank trading weak. As per a leading daily, State Bank of India has raised US$ 1 bn through a bond issue to qualified institutional buyers. The issue is in the form of unsecured bonds due in 2015 and is priced at a coupon rate of 4.5% per annum. This issue will help improve the bank's capital adequacy ratio and help the bank grow its asset book. SBI is also planning a rights issue this fiscal subject to government approval.

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