The Indian stock market had a strong outing today with all major indices seeing strong gains. After yesterday's sell-off, markets were trading in the green throughout today's trading session. While the BSE-Sensex closed higher by around 184 points (1%), the NSE-Nifty closed higher by around 59 points. The BSE-Midcap and BSE-Small Cap also saw similar movement and closed higher by 1.3% and 1%, respectively. While gains were seen in consumer durables and oil and gas stocks, IT stocks were the top losers, with tech stocks still under pressure.
As for global markets, Asian indices closed in the green today while European indices opened in the positive zone. The rupee was trading at Rs 44.55 to the dollar at the time of writing.
The anticipated ONGC follow on public offering (FPO) has once again been deferred and is unlikely to take place before mid-August of this year. This Rs 115 bn share sale in which the government plans to divest a 5% stake was initially supposed to take place in the financial year 2010-11. It was later scheduled for April, and then was later pushed to July 2011. Now the rationale is that the company should go for an FPO after reporting its first quarter results for the financial year 2011-12.
Oil and gas producers like ONGC have to recover a part of the revenues that oil marketing companies lose on selling diesel, LPG and kerosene at regulated rates. The discount that ONGC gives to companies like IOC, BPCL and HPCL on crude oil sold is decided on a quarterly basis. Due to sharing these under-recoveries, ONGC's realization on sales of crude oil was just U.S. $38.8 per barrel of crude oil in Q4FY11, while it should actually be receiving U.S. $58-60 per barrel in order to meet its planned capital expenditure. Once there is more clarify on the subsidy sharing mechanism, only then does it make sense to raise capital from the markets.
Software major Infosys (INFY) once again closed in the red today after its poor showing yesterday on the bourses, post declaring its 1QFY12 results. However the company is keeping up with its hiring momentum. The company expects it will hire about 12,000 people in the second quarter. The company currently has over 133,000 employees, and has reiterated its annual target of hiring 45,000 people in FY12. It is looking at a revival in spending on information technology (IT) to fuel its growth. It has maintained its hiring guidance despite the ongoing slowdown in Europe and the U.S.