Key indices languish in red

Tue, 3 Sep 11:30 am

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After a weak start, the Indian stock markets are still trading in the red during the morning session. Banking and Oil & Gas stocks have dragged down the markets while Realty and Metal stocks are offering some support.

The BSE Sensex is down 118 points and the NSE-Nifty is trading down 47 points. The BSE Mid Cap index is trading up 0.1% and the BSE Small Cap index is trading up 0.2% The Rupee is trading at 66.79 to the US Dollar.

Most of the IT stocks are trading mixed today. Tech Mahindra and TCS are leading the gainers while Infosys and Wipro are among the losers. India's largest software services exporter TCS is close to signing a large contract of Rs 2 bn with the Indian Income Tax Department to upgrade its IT infrastructure. Under the contract TCS will upgrade the department's entire nation wide IT infrastructure. This will involve updating the department's software and the hardware to ensure seamless integration of services and information across all its offices. This will improve efficiency and enhance coordination between various offices of the Tax department. The contract is for a period of 5 years.

TCS also signed a contract today with Saudi Arabia's National Commercial Bank to implement a new core banking software platform. The agreement between the two parties will be valid for two years. National Commercial Bank is the largest bank in Saudi Arabia. TCS did not disclose the financial details of the deal. TCS provides a range of retail banking solutions under BaNCS, its core banking suite. The banking, financial services and Insurance (BFSI) vertical contributed 43% of revenues for TCS in 1QFY14 and grew by 8% QoQ. TCS is trading up 1.4% today.

Food and Tobacco stocks are trading mixed today. Golden Tobacco and GSK Consumer are leading the gainers; while VST Industries and ITC are leading the losers. ITC stock is down 1% today. ITC has announced price hike in some of its cigarette products. It has increased prices of Gold Flake and Classic brands by about 10%. So now, a 10-cigarette Gold Flake Kings pack and 20-cigarette Gold Flake Lights pack will cost Rs 75; both up from Rs 68 earlier. Similarly, a classic pack of 20 cigarettes will now cost Rs 150 from Rs 136 earlier. This is the second price hike in Gold Flake brands in two months as ITC had hiked prices of Gold Flake brands in July. The company had cited sharp rise in excise duty on cigarettes and its adverse impact on the sales growth as a reason for price hike. In 1QFY14, ITC's cigarettes business grew 7% YoY and contributed 40% to the total sales.