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Indian stock markets lose steam
Wed, 20 Jul 01:30 pm

Indian stock market witnessed selling interest in the index heavyweights over the last two hours of trade. All sectoral indices except realty and FMCG are trading weak.

The BSE-Sensex and NSE-Nifty are trading 94 points and 27 points below yesterday's closing respectively. The BSE-Midcap index is down by 0.5% while BSE-Small cap index is up by 0.1%. The rupee is trading at 44.46 to the US dollar.

Software stocks have been trading mixed with Wipro and HCL tech leading the pack of losers and Mahindra Satyam leading the pack of gainers. Wipro has reported its quarterly results for the first quarter of fiscal year 2011-2012 (1QFY11). The company reported revenues at Rs 85.6 bn, up 3.2% QoQ (quarter-on-quarter). The bottomline declined by a 2.9% on a quarter on quarter basis. Operating margins for the quarter stood at 19.4% as compared to 20.2% seen during the previous quarter (ended March 2011). The decline in margins was on account of higher employee costs as well as higher marketing costs. The company has closed two large deals worth US$ 500 m in the banking and financial services industry this quarter. Attrition rates for the company stood at 22.6% which is nearly flat as compared to that seen in the previous quarter (4QFY11).

Energy stocks have been trading mixed with Essar Oil and HPCL leading the pack of losers while Gujarat State Petronet is trading in the green. As per a leading financial daily, GAIL (Gas Authority of India Ltd) may acquire 50% stake in Andhra Pradesh Gas Distribution (APGDC). The latter is a wholly owned subsidiary of AP Gas Infrastructure (APGIC). As per the industry sources, Andhra Pradesh Industrial Infrastructure (APIIC) owns a majority stake of 51% in APGIC, while AP Power Generation (AP Genco) owns the remaining 49%. As per APIIC management, APGDC is a new entity and hence not qualified enough to participate in the bids for gas distribution. Therefore, they need to tie up with GAIL so that they can bid jointly for gas distribution projects. The management also said that APGDC will be divesting 50 % in favor of GAIL initially.

On a separate note, sixteen companies have shown interest in purchasing gas from the Joint Venture between GAIL and government, out of which three have already signed a memorandum of understanding with GAIL. The stock is currently trading in the green.

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