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IT stocks drive market gains
Thu, 13 Oct 09:30 am

Asian stock markets have opened the day on a firm note. Stock market in Hong Kong (up 2.9%), Indonesia (up 2.4%), South Korea (up 2.0%) and Japan (up 1.9%) are leading the pack of gainers. The Indian stock market have opened the day on a firm note. Stocks in the IT (Information Technology) and banking space are leading the gains.

The BSE-Sensex is trading up by 80 points (0.5%) and the NSE-Nifty is up by around 14 points (0.3%). Mid cap and small cap stocks are trading in the green, with the BSE Mid Cap and BSE Small Cap indices up by 0.5% and 0.6% respectively. The rupee is trading at 49.02 to the US dollar.

Food stocks have opened the day on a firm note with Imperial Tobacco Company of India Limited (ITC) and Dabur in the green while Nestle in the red. In a bid to cash in on the higher demand during the festive season, leading biscuit makers such as ITC, Britannia, Parle and United Biscuits have increased prices in the range of 2% to 10%. The price rises have been effected at a time when there has been a significant decline in prices of raw materials such as edible oil, sugar and wheat. However, costs of inputs like milk products, cashew and cocoa have been on the rise. Most of the price hikes have been made in biscuit categories that do not cater to the value-conscious consumers. As such, the entry-level price points like Rs 5 and Rs 10 have been kept constant.

Steel stocks have opened the day on a firm note with Tata Steel and Jindal South-West (JSW Steel) in the green. The Government wants Steel Authority of India (SAIL) to partner with POSCO in the proposed steel project in Orissa. POSCO is the largest Korean steel firm and has been planning to set up a steel plant in Orissa worth USD 12 bn. The Steel Minister has said that the Government is willing to be a JV (Joint Venture) partner for the POSCO project. The Chairman of POSCO India said that the government intention will be conveyed to the Board of POSCO. The Korean steel giant has recently received the environmental clearance for its project in Orissa. The decision came in January 2011 after nearly 6 years of waiting. The MOU (Memorandum of Understanding) for the project was first signed in 2005 with the government of Orissa for a 12 m tonne steel project.

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