Software stocks gain, despite visa scare

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The Indian stock markets started the day on a positive note. However this momentum could not be sustained for very long and the indices slipped in the afternoon session. However, they soon recovered and continued to trend higher. Finally indices closed near the day's high ahead of the market holiday tomorrow on account of Gandhi Jayanti. The BSE-Sensex closed in the positive, higher by around 61 points (up 0.3%). The NSE-Nifty also closed higher by around 15 points (up 0.3%). The smaller indices had a better day on the bourses. The BSE Mid Cap index and the BSE Small Cap closed 0.9% and 1.4% higher respectively in trade today. IT and capital goods stocks saw a bulk of the gains today. Oil and gas and banking stocks were on the losing end in today's trade.

As regards global markets, Asian indices had a mixed outing today. European indices opened the day on a positive note. The rupee was trading at Rs 52.65 to the dollar at the time of writing.

Auto manufacturer, Mahindra & Mahindra (M&M) reported a 10% increase in total sales at 48,342 units in September 2012. The passenger vehicles segment (which includes the UVs and Verito) however registered an impressive 22% increase at 23,808 units versus the same month last year. Despite having a 99% diesel line-up, the company has seen very little impact of the recent Rs 5 diesel price hike by the government as this move was pretty much expected. Post the reduction in the Cash Reserve Ratio (CRR), banks have started reducing their lending rates which may bode well for vehicle manufacturers. This may offset the price hikes which the auto makers have been forced to undertake. The upcoming festival season may also play a booster. M&M has plans of hiking prices by 0.5-1.5% across its portfolio over the next few days. The hike will be taken on account of increase in commodity prices and other costs. M&M a host of other car makers such as Maruti Suzuki, Renault, General Motors and Honda who have already made similar price hike announcements.

If Microsoft has things its way, Indian IT companies could be facing a whopping US$ 5 bn payout over the next decade. The software biggie Microsoft Corporation has suggested a whopping fee of US$ 10,000 (over Rs 5 lakh) for a new category of H-1B visas and US$ 15,000 (more than Rs 7.5 lakh) for permanent residency or Green Card. Both these categories of H-1B and Green Cards, according to the Microsoft plan, would have an annual capacity of 20,000 and would be restricted to STEM (science, technology, engineering and math). The money thus raised would be used for the STEM education programs which would target long term improvements in such education in the United stated. This proposal will affect Indian companies the most as they grab the maximum such visas and will have to bear the cost if this proposal is affected. This suggestion was revealed at a Washington-based think-tank gathering last week by Brad Smith, general counsel & executive vice president, legal & corporate Affairs, of Microsoft.