The Indian indices staged a recovery in the last two hours of trade as buying interest returned in heavy weights. Stocks from the banking and PSU space are trading in the green, while stocks from the IT and FMCG space are trading in the red.
The BSE-Sensex is trading up by 20 points while NSE-Nifty is trading 4 points above the dotted line. BSE-Midcap index is up by 0.3% while BSE-Smallcap index is trading 0.1% above yesterday's closing. The rupee is trading at 46.79 to the US dollar.
Telecom stocks are currently trading mixed with Idea Cellular and MTNL trading firm, while Bharti Airtel and Tata Teleservices (Maharashtra) are trading weak. The plan of launching the mobile number portability (MNP) service - a service that allows mobile subscribers to switch their network without changing their mobile number - in India has been on the cards for a while now. The launch of MNP service has been delayed a number of times due to various reasons - the key one being of some telecom operators not being ready to implement the same. Others included the credibility of one of the companies that would be implementing this technology. However, this time around it seems that the Department of Telecommunications (DoT) has put its foot down and has urged telecom operators to be ‘MNP ready' from September 2010 i.e. next month. Furthermore, telecom operators that fail to do so would not be allowed to launch new commercial services. It may be noted that the government has the date of September 30, 2010, as the new rollout date for MNP in India.
It would be interesting to see the change in subscriber base of different operators based on this development once it is actually implemented. It would eventually be the quality of service and network that will determine the outcome.
India's industrial growth numbers for June were released today. After an eight month double digit rise, the industrial growth slowed to 7.3%. It may be noted that the industrial growth stood at 8.3% for June last year. The main reason for this has been the fall in manufacturing growth from 8% in June 2009 to 7.3%. Manufacturing constitutes around 80% of the Index of Industrial production (IIP). Electricity generation slowed from 8% growth in June 2009 to 3.5% growth in June 2010. Similarly, mining slowed from 14.2% in June 2009 to 9.5%. However, consumer durable growth stood at 27.4% vs. 16.2% the previous year. In June 13 out of 17 industries recorded a positive growth. Nonetheless, factory output expanded by 11.6% in the first quarter up from 3.9% in the same period the previous year. However, the decline in industrial expansion is expected to further increase RBI's dilemma on rate hikes.