Indian indices have recovered from the sharp decline witnessed during the earlier part of the day. However, they continue to struggle near the dotted line. Currently, heavyweights in the Sensex are trading weak with stocks from realty and banking space facing selling pressure. However, stocks from the metal and auto space are trading firm.
Currently, the BSE-Sensex is trading up by around 29 points, while the NSE-Nifty is trading flat. The mid and small cap stocks are facing a greater selling pressure with the BSE-Midcap and BSE-Smallcap indices trading lower by 1% and 1.6% respectively. The rupee is trading at 45.43 to the US dollar.
IT stocks are trading mixed with TCS and Infosys trading firm while NIIT and Aptech Ltd are trading in the red. India’s top technology firms are for the first time beginning to explore sub-contracting of projects to smaller vendors. The prime drivers are mitigating the risks of high attrition and wage inflation. These projects mostly involve commoditised skills and do not need complex programming expertise or understanding of a particular domain. Though they account for less than a per cent of the total projects delivered by TCS, Infosys and Wipro, experts tracking the sector say these companies could sub-contract up to 5% of their work over the next five years.
Auto stocks are currently trading mixed with Hero Honda and Maruti trading firm while Escorts, M&M and Ashok Leyland. A leading business daily has reported that auto major M&M is looking at entering the US market within a period of five years by launching electric vehicles for the group firm, Reva's portfolio. Reva Electric Car Company was acquired by M&M in May this year. This strategy is in line with the company’s long term target of having a global presence. As per the management, the US is an important market for electric vehicles. Further, it has been reported that the company is introducing the electricity driven technology in M&M's entire product portfolio. A final announcement for the same will be made sometime next year.
M&M seems to be quite aggressive in its US plans. Earlier, the company had planned on launching pick-up trucks (based on its Scorpio platform) in the US towards the end of 2009. However, due to various reasons (including the slowdown), the company had deferred its deadlines twice. It has again set the end of the current calendar year as the possible time for launching the vehicle in the country.