After opening in the positive, the Indian stock market remained rather jittery and succumbed to selling pressure in early trading. Toward noon, the indices seemed to have recovered the gains by moving slightly above the dotted line. But this did not last for too long and the markets eventually closed in the red. While the BSE-Sensex closed lower by around 139 points (down 0.9%), the NSE-Nifty closed lower by around 49 points (down 1 %). The BSE-Midcap and BSE-Small cap, also saw some selling pressure. They closed lower by 0.9% and 0.8%, respectively. The IT and metal sectors saw a bulk of the losses, with realty and healthcare indices seeing some gains.
As for global markets, most major Asian indices closed in the green today, with India being one of the exceptions. Most European markets saw a strong opening. The rupee was trading at Rs 46.08 to the dollar at the time of writing.
Tata Consultancy Services' (TCS) business process outsourcing (BPO) arm has seen no impact of the global economic uncertainty on its business. Its BPO arm clocked in revenues of U.S. $925 m in the financial year 2010-11, a growth of 27% over last year. If it continues at this pace, it soon hopes to cross the $1 billion mark. It houses a total of 35,000 employees, out of which 30,500 are based in India. Now the company is planning on setting up a greenfield BPO center in Ahmedabad that can house 2,000 people. The center will be located at the company's upcoming 35-acre campus. In its first phase, expected to be completed by December, the BPO would house 1,000 people. This move is part of the company's broader strategy to harness the talent available in Tier-II cities. Other than the major cities in India, the TCS BPO is also present in Kolkata and Pune. Over the next few quarters the company is also planning on growing its headcount in Manila (Philippines) to 1,000 people, from 300 currently.
Food inflation once again inched closer to the double digit mark on the back of higher costs of onions, potatoes, fruits and protein-based food items. Food inflation rose to 9.8% for the week ended August 13, from 9.03% in the previous week. As per government data, prices of onions rose by 44.4% on a YoY basis, while potatoes rose by over 16%. Fruits, eggs, fish and poultry also saw double digit increases. The government optimistically believes that inflation will come down to 6% by the end of this year. But the prospects look dim. Headline inflation (WPI), which factors in manufactured items, fuels and non-food primary items, besides food, stood at 9.22% in June. In response to inflationary pressure, the central bank has raised its key rates 11 times since March 10, but to no avail. It expects inflation to remain high at least till October 2011 before cooling off.