The Indian markets continued to ramp up gains during the previous two hours of trade. Gains were seen across the board. Currently stocks from the IT space are trading firm, ahead of their results season. Stocks from the PSU and power are however witnessing less buoyancy. The market sentiments are very positive at the moment as the advance to decline ratio is poised at 2.1 to 1 on the overall BSE.
Currently, the BSE-Sensex is trading up by around 332 points (up 1.6%), while the NSE-Nifty is up by about 98 points. Stocks from the mid and smallcap spaces are also positive with the BSE-Midcap and BSE-Smallcap indices trading higher by 0.8% and 1.2% respectively. The rupee is trading at 44.47 to the US dollar.
Banking stocks are trading positive with Union Bank of India and Punjab National Bank (PNB) leading the gains. India Infrastructure Finance Company Ltd (IIFCL) recently signed a Rs 15 bn takeout finance agreement with Union Bank of India for the development of seven power and road projects in the country. This is the first such transaction that IIFCL has undertaken. It targets to provide Rs 30 bn of takeout finance facilities this year. The company has also signed agreements with PNB, Indian Bank, Allahabad Bank and United Commercial Bank to help fund infrastructure projects in the country. Takeout financing is mainly aimed at addressing the asset-liability mismatch faced by banks while lending to infra sector. As per the scheme, IIFCL will take out the infrastructure loan from the books of the original lender (banks) after a certain period. This will be up to 100% of the outstanding loan amount. This is however subject to the condition that the total takeout amount does not exceed 50% of the total residual loan of the infrastructure projects. IIFCL is engaged with several public sector banks to help make takeout financing scheme attractive.
IT stocks are trading strong with NIIT Technologies and TCS notching gains. HCL Technologies recently announced that it has drawn up a new set of business strategies which would focus on five new areas. It plans to invest in new focus areas which include cloud computing, e-governance, mobility, smart grid and biometrics over the next five years. The company plans to play on innovation by concentrating on these vertical specific areas. The company CEO Vineet Nayar also termed China as a threat as well as an opportunity for the Indian IT industry. HCL is ramping up headcount in China as it believes that China will be the lowest cost manpower supplier by 2015. Also, in a defensive strategy towards China, the company is planning to focus on smaller cities and exhaustive training in its centers. HCL also noted that Japan is a land of opportunities which will explode in a big way in response to opportunities from China.