Monday morning blues!

Carrying on from what was seen at close of the last week, the Indian markets have opened this week on a poor note. Apart from selling across key index heavyweights, selling in stocks from the auto, banking, software, commodity and telecom sectors has added to market woes.

The BSE Sensex is trading at 6,432 (down 47 points) and the Nifty is trading at 2,016 (down 15 points). The rupee is trading at Rs 43.73 per US Dollar.

In line with the overall market sentiment, software stocks have opened today on a weak note and major losers here include Polaris (2%), HCL (HCLL.BO, news) Tech (2%) and Infosys (1%). Mid-size player, MphasiS, is however among the very few gainers and the stock is up marginally. The company's slated announcement of its full year results later today seems to be fueling interest in the stock currently. The company has performed poorly in the last three quarters of the fiscal and the management has indicated supply (of manpower) constraints as a major reason for the same. The latest acquisitions, of Eldorado Computing and Princeton Consulting, seem to go in this very direction of plugging in the demand-supply gap and filling in new niches to the company's portfolio of offerings. During presentation of its FY04 results, the management of the company had projected revenues and profits to rise by 35%-40% and 40%-45% in FY05. Considering the current momentum of growth, we believe that the company would not be able to meet these targets. However, the strategies MphasiS is putting into place currently augurs well for its long-term growth prospects.

While gaining on a week-on-week basis, the US indices closed in the negative zone on Friday. While the Dow closed 0.8% down, the NASDAQ ended with almost 1% losses. Apprehensions about corporate America's performance in the fourth quarter results (that have already started coming in), and a downgrade of the auto major, General Motors, led to the selling in Friday's trades, which followed four straight days of gains. This week brings a slew of major financial results and economic reports that are likely to have a major effect on market movements. Also impacting sentiment will be the movement of crude prices, which have now settled to just over US$ 53 per barrel. In global trades, while Asian markets closed last week on the red, buying was seen across those from the European region.

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