IT stocks weigh on the markets

Thu, 13 Jan 09:30 am

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Asian markets have opened the day on a positive note. Benchmark indices in Indonesia (up 1.2%), Japan (up 0.6%) and Hong Kong (up 0.5%) are leading the pack of gainers. Indian markets, however, have opened the day in the negative. IT stocks are the biggest losers.

The BSE-Sensex is trading lower by around 63 points (0.3%), while the NSE-Nifty is down by about 24 points (0.4%). Mid and small cap stocks are however, trading in the positive, with the BSE Midcap BSE Small cap up by 0.2% each. The rupee is trading at 45.09 to the US dollar.

Telecom incumbent Bharti Airtel has announced that it plans to launch 3G services very soon. The company that has recently revamped its logo was to launch its 3G services by the end of 2010. However, due to lack of adequate preparations, the launch was postponed to early 2011. Tata Docomo was the first to launch 3G services in the country with its launch in nine circles last year. RCOM soon followed suit with its launch in four circles. Other major players like Vodafone have announced their plans to launch their services in the quarter of Jan-Mar 2011. Bharti has won 3G spectrum for 13 circles including the lucrative metro circles of Delhi and Mumbai. We just hope that Bharti launches its services soon. After all the first mover advantage in case of telecom is huge. The more it delays its launch, the more advantage its competitors will have over the company. The stock of the company is currently trading in the green. RCOM is trading in the green as well. However, Idea Cellular has opened the day in the red.

Power stocks have opened the day on a good note. PTC India, GVK Power, Reliance Power and NTPC are the major gainers. However, stocks of Tata Power and Power Grid Corp are witnessing selling pressure. India has ambitious plans for solar energy. The national solar mission has set a target of 20,000 MW and plans to achieve this target in three phases by 2022. But solar power is expensive. However, to achieve the target, thirty solar power producers had been shortlisted by the mission on the basis of the discounts that they propose to offer. The selected companies were actually offering very cheap rates. There were fears that the companies may not actually come up and sign power purchase agreements (PPAs). However, these fears were laid to rest as these companies came forward and signed the PPAs with NTPC yesterday to set up projects with capacities of 620 MW. This comes as an important milestone for the Indian solar industry. Maybe if all goes well, then India's green power plans may actually see the sun shining by 2022.