The Indian stock market lost ground during the last two hours of trade on account of selling pressure in index heavyweights. Except for consumer durables, all other sectoral indices are trading weak. Stocks from the realty, PSU, power and metal sectors are leading the pack of losers.
The BSE-Sensex is trading down by 141 points while NSE-Nifty is trading 44 points below yesterday's closing. The BSE Mid Cap
and BSE Small Cap
indices are trading down by 0.2% each. The rupee is trading at 49.10 to the US dollar.
Software stocks have been trading mixed with HCL Technologies, Info Edge and NIIT Ltd leading the pack of gainers. However, Wipro, Tech Mahindra and Tata Consultancy Services (TCS) are trading weak. As per a leading financial daily, software companies are going to delay the joining of freshers due to the prevailing uncertainties in the global demand environments. However, most of the companies in this sector have not admitted this fact in public. They are still maintaining that they will go with their hiring plan. However, statements made by recruitment agencies and engineering colleges paint an altogether different picture. According to them, many graduates who have passed out this year are yet to get their appointment letters from Information Technology (IT) companies. Their wait may go up to September 2012. In the worst case, some of them may not fetch an appointment at all. Also, according to recruitment agencies, lateral hiring has almost stopped. IT companies mostly decide their hiring based on deal pipeline and attritions. Besides sluggish deal flow, average attrition has also come down in the software industry. All this is affecting the hiring plan decided earlier.
Banking stocks have been trading mixed with Karur Vysya Bank, J&K Bank and Karnatka Bank leading the pack of gainers. However, Development Credit Bank and Kotak bank are trading weak. As per a leading financial daily, Axis bank has launched a lifetime fixed rate home loan named Nishchint. The interest rate for this 20-year tenure loan would be 11.75%. This will make it the cheapest home loan available in the market. Most of the banks charge in the range of 13-13.5% for fixed rate home loans. Being a late entrant in the home loan segment, Axis Bank is trying to increase its market share with attractive rates.
Experts are, however, not recommending this loan to customers for various reasons. According to them, now interest rates are reaching peak of the cycle. Considering the slower economic growth, interest rates have to come down. There is another problem of prepayment penalty of 2% on the outstanding loan amount. Therefore, it would be costly to switch to floating rate once the interest rate will come down. All this put a question mark on the success of this new product. The stock of the company was trading in the red.