Thursday April 18, 09:00 AM
Tech smiles again... |
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By Equitymaster.com
The BSE Sensex witnessed a contrary movement over the last three days compared to sentiment in the markets globally. While software and MNC pharma stocks sparked a rally in the markets, FMCG majors curtailed the overall gains. The index heavyweight, HLL was mainly responsible for over 2.5% loss in Sensex.
Meanwhile, the trend in the global markets was mixed for the last three days. Asian markets recorded strong gains and the US markets were volatile on corporate earning concerns. The latest to join the list is Ford, the world's second largest carmaker. The company reported a hefty US$ 800 m loss in the first quarter due to decline in US sales. It was the fourth straight quarterly loss recorded by Ford. On the other hand, Pfizer (PFIZ.BO, news) , the world's largest drug maker, reported a strong 22% rise in first quarter profits driven by healthy sales across all its product lines.
Back to India slew of companies are expected to come out with their scorecards in the current week. Among the major ones include HCL (HCLL.BO, news) Infosystems, which is expected to post discouraging results today. The company is expected to report lower revenue growth on the back of slowdown in volume sales and stiff pressure on realization.
Tech companies till now declared better than expected results with continuous initiative to boost revenue growth. Business process outsourcing (BPO) is the emerging area on which most of the tech majors aim to leverage. Large pool of english speaking qualified Indians and low billing rates are attracting multinational companies to set up their operations in India. To put things in perspective, World Bank has recently shifted its global accounting operations to Chennai. General Electric already has over 10,000-seatt capacity BPO set-up in India. Others setting up or expanding their operations include container shipping company, P&O Nedlloyd, Dutch groups ABN AMRO and ING, Agilent Technologies, Cap Gemini Ernst & Young and American Express. According to research and consulting firm, Gartner Inc, the BPO business globally is expected to witness CAGR of 14% to US$ 234 bn by 2005.
In the near term, the trend in the markets is likely to get influenced by quarterly results. Old economy companies are yet to come out with their results. Any pressure on margins or lower revenue growth is likely to result in the Sensex moving in a narrow range.
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