Markets rise on Asian cues

Thu, 24 Mar 09:30 am

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Asian stock markets have opened the day on a positive note. Markets in Korea (up 0.8%), Hong Kong (up 0.8%) and Singapore (up 0.8%) are leading the pack of gainers. However, markets in Japan are trading flat with a negative bias. The Indian stock markets have opened the day on a positive note as well. Stocks in the realty and banking space are the main gainers.

The BSE-Sensex is trading higher by around 127 points (0.7%), while the NSE-Nifty is up by around 38 points (0.7%). Midcap and small cap stocks are trading in the positive as well, with the BSE Midcap and BSE Small cap indices up by about 0.6% each. The rupee is trading at 44.83 to the US dollar.

Energy stocks have opened the day on an upbeat note. Petronet LNG, HPCL and Reliance Industries are the biggest gainers. The nuclear crisis in Japan has caused liquefied natural gas (LNG) prices to shoot up by 25-30%. This is because the disaster-stricken country will seek the fuel to meet to power gap as several nuclear power plants have been shut down. Hence, the players in the city gas distribution (CGD) sector in the state are bracing for a price revision. The CGDs such as Gujarat Gas Company Ltd (GGCL), Gujarat Adani Energy Ltd (GAEL) and Gujarat State Petroleum Corp (GSPC) get only a fraction of natural gas from the domestic fields. They have to rely on the expensive imported LNG to meet the consumer demand. About 25% of the natural gas demands are met through imported LNG, both under the long term contract and short term contract. The spot prices for LNG have already shot up to about US$ 13-14 per mmBtu from under US$ 10 before the earthquake.

IT stocks have opened the day in the positive zone as well. Heavyweights such as TCS, Infosys and Wipro are all trading in the green. The country’s third largest IT company, Wipro has announced that it would be giving a salary hike to all the employees in its IT business. The company has recently undergone some organizational changes which included a change in the head of the IT business. The new head, Mr. Kurien, has stated that the new organizational plan has been devised in conjunction with an external consulting firm and is now in place. He also stated that a cross-functional team is currently working on finalizing a plan to migrate all of Wipro’s data to the new organization structure. This task is expected to be completed by end of April this year. As a part of the new structure, the company would be looking at rewarding its employees with a salary hike. The exact details of the hike are expected to be announced by first week of April. Wipro has lagged behind its peers in terms of revenues and orders in recent times. This had led the company to undertake several organizational changes to realign its strengths to compete more effectively.