Indian Markets Monday Wrap-Up: India Leads Gains in Asia

Fiscal stimulus announced last Friday evening boosted the market sentiments throughout the trading session. Buying activity intensified towards the end as indices closed well above the dotted line. The Sensex closed higher by around 340 points, while the Nifty closed higher by 80 points. Stocks from the Mid-cap and Small-cap indices also ended in positive territory. While stocks from the metal, energy and banking sectors managed to garner investors’ interests, stocks from the FMCG space remained out of favour. Rupee closed at 48.67 against the US dollar. The Asian markets closed in the green today. The European indices are currently trading firm.

Software stocks ended on a firm note led by Tech Mahindra, Infosys and HCL Technologies. However, the stock of Satyam Computers ended deep in the red due to speculative news of it merging its business. As per a leading business daily, the rationale behind the same is due to the threat of being acquired by a domestic or overseas company, including private equity firms. As such, the company’s management is exploring the option of a merger with another software company. The management of Satyam has scheduled a board meeting on January 10 and is expected to address the issue of the dilution of the promoters’ stake and increasing the number of independent directors.

As per a leading business daily, SBI has picked up 19.7% stake in Mayfair Hotels and Resorts (MHRL) through a private equity (PE) deal. MRHL is an Orissa based company having properties in various locations including Bhubaneswar, Puri, Rourkela and Darjeeling, amongst others. However, the total value of the deal is not known. This move by the bank, especially in these times, comes as a surprise considering the outlook and present conditions of the hospitality sector. However it may be noted that MRHL is a leading player in the sector in East India.

After bagging the license way back in the early part of 2007, telecom major, Bharti Airtel is all set to launch its telecom services in the island nation, Sri Lanka. This will make it the fifth mobile service operator in the country. The launch is scheduled for January 12, 2009. As per a leading business daily, the company plans to roll out 2G and 3G services, simultaneously. It may be noted that the company will be outsourcing its IT operations and networking operations to other companies. As such, this move will help it replicate a similar low cost business model as it provides in India.

As per a leading business daily, prices of commodities and vegetables are expected to rise if the nationwide transporters’ strike continues. Nearly 4,000 associations, part of the All India Motor Transport Congress (AIMTC) have commenced the strike from Monday midnight. The reason for the strike is due to the transporters demanding a bailout for the sector to address issues such as high price of diesel, tyres, and permits, amongst others.

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