Software stocks lead markets higher

Thu, 5 Aug 09:30 am

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The Indian markets have started today's session on a positive note. The benchmark indices opened above the breakeven mark and have stayed firmly in the positive territory since then. Other key Asian markets are also in the positive with Indonesia (up 1.3%) leading the pack of gainers. The US markets closed higher by 0.4% yesterday.

Currently in India, heavyweights from the BSE-Sensex are trading strong with software and engineering majors finding investors' favour. The BSE-Sensex is trading higher by around 50 points, while the NSE-Nifty is up by about 10 points. Buying interest is also being witnessed among mid and small cap stocks as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.5% and 0.6% respectively. The rupee is trading at 46.24 to the US dollar.

Financial stocks have opened the day on a strong note. Gainers here include IDFC and REC. IDFC announced its 1QFY11 results yesterday. Its consolidated income from operations grew by 10% YoY during the quarter. This was on the back of 39% YoY growth in advances. The institution's disbursements grew by 302% YoY while approvals grew by 199% YoY. Its asset management fees declined 10% YoY and the total assets under management (AUM) stood at Rs 321 bn at the end of June 2010. Net interest margin (NIM) improved by 0.2% due to lower funding costs. Other income grew by 151% YoY due to higher income from principal investments and loan related fees. The institution reported a bottomline growth of 22% YoY during the quarter. Its capital adequacy ratio stood at 19.1% at the end of 1QFY11, compared to 21.9% at 1QFY10.

Energy stocks have also opened the day on a positive note. Gainers here include Castrol and Indian Oil. As per a leading business daily, the ONGC led consortium of energy companies has proved the commercial viability of their Mahanadi gas finds to its management committee. Every oil and gas asset has a management committee akin to the board of directors. It includes members from the oil ministry and the directorate general of hydrocarbon. This paves the way to start production from the field having about 2.7 trillion cubic feet of natural gas reserves. The block is expected to start production by FY16. The block was awarded under NELP II auctions in 2001. The discovery was made in 2006. Normally a deepwater block takes a time of 8 to 10 years from discovery to production. ONGC is the operator of the block, and has a 40% stake. Indian Oil, Oil India and Gail have 20% stake each.