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Mid & small caps buck trend
Wed, 26 Nov Closing

After trading in the marginally positive zone during post noon trading session, the Indian equity markets failed to gather ground and closed flat for the day. While the BSE-Sensex today closed higher by 48 points, the NSE-Nifty closed higher by 33 points. However, Midcaps and Smallcaps closed with modest gains. While the BSE Mid Cap index was up by 0.6% the BSE Small Cap index closed higher by 1.1%. Realty stocks were the biggest gainers today.

As regards global markets, Asian pack closed strong today. Except for Nikkei 225, all the Asian indices closed in the green. The rupee was trading at Rs 62 odd levels to the dollar at the time of writing.

IT stocks ended the day on a weak note. Persistent Systems stated that it expects a 15% revenue growth this fiscal. The company made early investment into SMAC i.e social, mobile, analytics and cloud and has benefitted from it. Currently, about 50% of the revenues come from newer technologies. Also, the opportunity is so huge in the market that the company is expecting to double or treble itself from here on. However, considering that Persistent is focusing on newer technologies there could be some transition in existing customers. It may also go down for some time. However, over the longer period, the company is confident of its strategy to focus on newer technologies which shall be the key driver for growth.

The government is planning to divest stake in Coal India, Steel Authority of India (SAIL) and Oil and Natural Gas Corporation Ltd. (ONGC) by the end of Jan 2015. While the final date has not been decided as yet, the disinvestment department is assessing the market conditions and stakes in either Coal India or ONGC may well be divested within next two weeks. If the stake sale does go through then the government will get Rs 220 bn from a 10% divestment in Coal India and Rs 165 bn from a 5% divestment in ONGC based on yesterday's closing prices of both the stocks. While the market conditions may have improved, it would be interesting to see what kind of response both the issues get. If the government is able to raise the desired money, it shall definitely help in cushioning the fiscal gap.

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Jan 24, 2018 01:33 PM