Indian Markets Tuesday Wrap-Up: IT Stocks Help In Curbing Losses

Markets ended the day on a weak note after trading in the positive for most of today’s session. The final hour of the day’s trade was marked by considerable volatility. The Sensex closed lower by around 40 points, while the Nifty ended lower by around 10 points. Stocks from the mid-cap and small-cap indices also ended in the red. Stocks from the IT, consumer durables and FMCG spaces managed to garner investors’ interests, while stocks from the energy and metals space bore the brunt of profit booking. Rupee closed at 49.02 against the US dollar. While the Asian markets ended on a weak note, the European indices are currently trading in the red.

As per a leading business daily, Chennai Petroleum Corporation is planning to invest nearly Rs 38 bn towards expanding its refining capacities by 2011. The company currently has a 3 m tonnes per annum diesel (mtpa) refining capacity, which it plans to increase to 4 mtpa by 2011. The company will invest nearly Rs 35 bn for the same. Rs 3 bn will be invested towards enhancing its petrol capacity from 9.5 mtpa to 10.5 mtpa. The company plans to raise the money from a mix of internal resources and bank borrowings. This news comes at a time when the demand for refined products has been sluggish due to the global economic slowdown. Moreover, the industry is facing a likely overcapacity situation with refinery capacities being added in the Middle East.

As per a leading business daily, IDFC’s 100% subsidiary, IDFC Projects has signed two deals for investments in the power sector in Gujarat. In each of the ventures, IDFC Projects would be holding nearly 49% stake. The move is in line with the company’s plans to concentrate on sectors that hold good growth potential in the coming years, particularly power and telecom. However, IDFC has indicated that it will go slow on incremental sanctions. IDFC’s disbursement to sanction ratio fell from 68% in 1HFY08 to 55% in 1HFY09. The company has also cited pressure on funding costs and NIMs.

As per the United Nations Food and Agriculture Organisation (FAO), India’s crop productivity is lower than most of its Asian peers. Even countries like Afghanistan, Nepal and Bangladesh are ahead of India. The small size of land holdings and low investments are the reasons for India lagging behind. The share of the agricultural sector in the overall GDP has declined from 44% in 1991 to almost 17% in 2007. While the other sectors are clocking near double-digit growth rates, the agricultural sector is merely growing at the rate of 2% to 3%. In the past eighteen years, the sector has grown at a CAGR of 1.8%.