Software, metal stocks boost markets

Tue, 22 Nov 01:30 pm

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The Indian stock market continued to trade firm on account of sustained buying interest in heavyweights during the last two hours of trade. Stocks from the software, metal, auto, and banking sectors are leading the pack of gainers while those from consumer durables and FMCG sectors are trading weak.

The BSE-Sensex is trading up by 264 points while NSE-Nifty is trading 69 points above yesterday's closing. The BSE Mid Cap and BSE Small Cap indices are trading up by 0.4% and 0.2% respectively. The rupee is trading at 52.45 to the US dollar.

Most of the software stocks have been trading in the green with Mphasis Ltd, Infosys and Tata Consultancy Services (TCS) leading the pack of gainers. However, NIIT Ltd and Info Edge are trading weak. As per a leading financial daily, the second largest Indian software company Infosys has once again given a cautious signal with regards to the prevailing uncertain demand environment. Please note that the company has started the current financial year with a cautious commentary on the company's prospects during the year. According to Mr V Balakrishnan, Chief Financial Officer of the company, though the company would be able to meet its set target of revenues growth during the third quarter of the current financial year (3QFY11) but it would be difficult to reach the upper end of the targeted growth. He added that the demand environment is worsening by the day. In this situation, the company is not sure whether it would achieve the lower end of the target or the higher one.

Infosys has been regarded as the bellwether of the Indian software industry. Therefore, these kinds of warnings are always regarded as the signals for the other software firms. Since the company is maintaining this stand from the beginning, hence the analysts are not reading too much in this warning. The stock of the company is trading firm.

Energy stocks have been trading mixed with Cairn India, Bharat Petroleum Corporation Ltd (BPCL) and Gujarat Gas leading the pack of gainers. However, Indraprastha Gas, Gujarat State Petronet and Castrol India are trading weak. As per a leading financial daily, GAIL India would be facing a strong competition from other players such as Gujarat State Petroleum Corp (GSPC) and Adani Group, in its attempt to buy the BG Group's controlling stake in country's largest private sector city gas distribution firm, Gujarat Gas Company Limited (GGCL. These companies are evaluating their options to pursue a deal with BG Group that wants to hive off its 65% interests in GGCL with market capitalisation of over Rs 45 bn.

The Gujarat government has yet not cleared its position over BG Group's decision to hive off its interests from GGCL. However, according to the top officials in the government, the government will support GSPC if it finds the deal with BG group is viable.