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Banking stocks drag markets lower
Thu, 3 Apr 11:30 am

After opening weak, the Indian indices are trading below the dotted line in the morning session. The buying interest is highest in pharma and metal stocks while the selling pressure is highest banking and engineering stocks.

The BSE-Sensex is trading down 60 points and the NSE-Nifty is trading down 23 points. The BSE Mid Cap index is trading down 0.2% and the BSE Small Cap index is trading down 0.1%. The rupee is trading at 60.13 to the US dollar.

Most software stocks are trading lower today. Wipro and Tech Mahindra are among the stocks leading the losses. India's leading software firm Tech Mahindra has announced the successful completion of a major project. The firm has completed a total overhaul and upgrade of the billing system of telecom firm Narwas which is part of the Ooredoo group. The project had involved a change of the older hardware systems as well as data migration to the new system. Narwas has said that Tech Mahindra will continue to remain its strategic partner. The IT firm has stated that the Middle East and Africa, in which Narwas operates, is very important to them and Narwas is one of its key clients in the region. Tech Mahindra is trading lower by 0.7% today.

Engineering stocks are trading mixed today. While Punj Lloyd and L&T are trading weak, Elgi Equipments is trading higher. As per a leading business daily, engineering major L&T is likely to write off about 10% of its Rs 1,700 bn order book in FY14. For instance, the company plans to cut about Rs 150 bn worth of orders that lacks approvals or are facing issues with government. The write off is expected primarily in the roads, minerals and metals industries. Majority of orders is expected to be curtailed mainly in the construction business, the company's largest business segment. The management confirmed it would remove orders worth Rs 90 bn from the construction business. This includes 5 orders from GVK Infra, GMR Industries and from its own subsidiary L&T IDPL. This is second year in a row that the company has proactively writes off delayed orders. Last year, L&T had written off Rs 170 bn worth of orders. Notably, the unmoving orders are not accruing to the P&L, so it won't impact the company topline.

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