Metals support the markets

Tue, 8 Feb 09:30 am

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Asian markets are trading in the mixed. Benchmark indices in Malaysia (up 0.4%) and Japan (up 0.3%) are trading in the green. However, markets in Indonesia (down 0.3%), Korea (down 0.1%) and Hong Kong (down 0.1%) have opened in the negative. Markets in China remained closed today on account of the Lunar New Year. Indian markets have opened the day in the on a good note. Stocks in the metal and power sectors are the leading gainers.

The BSE-Sensex is trading higher by around 32 points (0.2%), while the NSE-Nifty is up by around 10 points (0.2%). Mid and small cap stocks are trading in the positive as well, with the BSE Midcap and BSE Small cap indices up by about 0.3% and 0.1% respectively. The rupee is trading at 45.35 to the US dollar.

IT stocks have opened the day in the positive zone. IT majors, Wipro, TCS as well as Infosys are all witnessing buyers' interest. In its attempt to be more client centric, Wipro has decided to restructure its IT division. The company that has recently had a change in the head of the IT services has decided to organize the IT business under six distinct business units. These will be 'Energy and Utilities', 'Finance Solutions', 'Media and Telecom', 'Pharmaceuticals, Healthcare & Life-sciences', 'Manufacturing and Hi-Tech & Retail Consumer Goods', 'Transportation & Government'. The sales and marketing teams as well as the delivery teams will be aligned with each of the respective business units. The new structure will be implemented from the 1st of April onwards. The management has stated that this reshuffle will help strengthen the company's ability to build depth in its technology competency. This is the first reshuffle since the new CEO, Mr. T.K. Kurien has taken charge. The IT services division of Wipro currently has a revenue base of around US$ 6 bn. The company has seen a slowdown in its volumes during the third quarter but expects this seasonality to be evened out in the coming quarters.

Engineering stocks stocks have opened the day on a weak note. Punj Lloyd, ABB and L&T are trading in the red. Power equipment manufacturer, BHEL, has signed an agreement with Spain based Abengoa to set up solar power projects in India. The agreement will enable both the companies to leverage their capabilities in offering EPC solutions for power projects in India. It will also give them an opportunity to explore similar projects in other parts of the world. Abengoa has capabilities in solar, bio-energy, environmental services and power sectors. It has a strong presence in Spain, European Union countries as well as in USA and Latin America. Neither BHEL nor its Spanish counterpart has given out any financial details of the agreement as of now.

The agreement is a step in the government's ambitious solar power plans. The government has a target of achieving at least 20,000 MW of solar power generation capacity by 2022.