Sensex down 0.6% for the week

Fri, 23 Mar Closing

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The indices in the Indian stock markets scaled the highs of the day and then gave up some of their gains during the closing stages. They nevertheless managed to finish the session on a strong note. While BSE-Sensex edged higher by 165 points (up 1%), gains on the NSE-Nifty came in at around 50 points. BSE Mid cap and BSE Small cap indices also closed higher, gaining 0.6% and 0.4% respectively. Nearly three stocks gained for every one that closed the day in the red on the Sensex.

While Asian markets closed mixed today, Europe too has opened along similar lines. The rupee was trading at Rs 51.2 to the dollar at the time of writing.

Despite today's gains, Sensex has closed lower by 0.6% for the week. It is nevertheless up more than 12% since the start of 2012. Thus, the first quarter of the year is nearly coming to an end and if the index manages to notch up similar performances in the forthcoming quarters as well, 2012 could turn out to be a very strong year. Of course, we can't say with certainty that this will indeed happen for short term predictions are very hard to make. Besides, in the short term, Indian markets are driven more by Foreign Institutional Investors (FIIs) sentiments and liquidity in the west, thus making matters even more difficult. Over the long term though, the India growth story remains as unblemished as ever according to us.

Engineering major Thermax is believed to have acquired the steam division of Virgo Valves and Controls, India and its German subsidiary company-Rifox-Hans Richter Gmbh, a leading steam traps and allied steam accessories manufacture, in a deal worth Rs 134 m. The acquisition will give Thermax an access to the manufacturing facilities of the concerned company in Germany as well as India. It should be noted that Rifox is a respected brand in specialty products for compressed air, pressurised gas and pressurised liquid and has a significant presence in Germany and other European markets. Thermax closed lower by 1% on the bourses today.

Although there are frequent outcries in the US against outsourcing to India, a report by NASSCOM presents an entirely different picture. As per it, Indian IT industry has contributed substantially to the growth of the US economy and has paid $15 billion as taxes as well as generated employment for 2.8 lakh people. This is not all. Through their mergers and acquisitions, the Indian IT companies have invested more than US$ 5 bn in the US and have also helped save thousands of jobs. Finally, leading Indian companies plan to increase the number of offers made on US campuses to four times the current hiring. Thus, outsourcing to US by Indian companies is turning out to be a two-way street and not as lopsided as it is being made out to be. Both Infosys and Tata Consultancy Services (TCS) closed higher today.