Indian Markets Wednesday Wrap-Up: Power, Healthcare Aid the Indices

Buying activity during the second half of today’s trading session led the markets to recover their losses and end the day on a positive note. The BSE-Sensex ended higher by around 98 points, while the NSE-Nifty closed up by about 45 points. Stocks from the mid-cap and small-cap spaces ended the day on a positive note, recording gains of 2.3% and 2.2% respectively. Buying activity was witnessed in stocks from the power, consumer durables and health-care spaces, while stocks from oil & gas and banking space led the pack of losers.

Other Asian markets also ended the day on a positive note. The European indices are currently trading in the green as well. Rupee was trading at 48.45 against the US dollar at the time of writing.

Stocks from the IT sector are trading firm led by TCS and Infosys (INFY). According to a leading business daily, Japan’s third largest automaker, Nissan (NSANY) is scouting for outsourcing bids from Indian IT majors like Infosys, TCS, Wipro (WIT) and Mahindra Satyam. The automaker plans to outsource application development and maintenance worth around US$ 250 m. With Japanese majors like Nissan, Toyota and Sony are expected to spend around US$ 2 bn in outsourcing IT and back-office operations to Indian companies; this development is unlikely to be a one-off event for the Indian IT industry. It’s worth noting that Japanese firms prefer significant local presence or tie-ups with Japanese IT vendors while awarding contracts.

As reported by a leading business daily, BHEL has won an order worth Rs 1 bn from Indian Oil Corporation (IOC) for installing a captive power plant at its Barauni refinery complex. The project will augment the existing captive power plant in supplying uninterrupted power supply to its refinery. BHEL will oversee all the activities from design, engineering, manufacture, supply, erection and commissioning of the power plant. It may be noted that BHEL currently has an order book of Rs 1,174 bn which will be executed over the next 3-4 years. The stock is trading in the green while IOC stock is trading in the red.

According to the latest predictions of the Organization for Economic Cooperation and Development (OECD), the combined economy of the most industrialized countries of the world will shrink by 4.1% this year and grow at 0.7% in 2010. This is better than the previous projections of a fall of 4.3% this year and a growth of just 0.1 percent next year. It is particularly upbeat about the bottoming out of the US economy around mid-2009. It predicts that the US will contract by 2.8% this year and grow at 0.9% next year, which is much better that what was previously estimated for the world’s largest economy. These projections are in contrast with the recent estimates of the World Bank which is still pessimistic about any short-term recovery at the global level.