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Business News/ Money / Personal-finance/  Markets steady; TCS rallies on strong result
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Markets steady; TCS rallies on strong result

Markets steady; TCS rallies on strong result

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Mumbai: Indian shares were trading steady in a subdued Asia on Friday, thanks to export-focused outsourcers that rose after Tata Consultancy Services beat quarterly forecast and said it was seeing strong demand.

Brokerages such as JPMorgan, BNP Paribas, Macquarie, HSBC and RBS Equities raised their target price for TCS, India’s biggest software services exporter, indicating their optimism about the outlook despite woes in Europe, a key market.

TCS rose as much as 5.3% to rS825.90, and was the top gainer in the main index.

By 11:33am, the 30-share BSE index was trading up 0.06 percent at 17,920.45, with half of its components gaining. The 50-share NSE index was up 0.1% at 5,383.95.

“Our preference for TCS has been based on the expectation of industry leading volume growth and improving margin performance," Macquarie analysts Nitin Mohta and Atul Soni said in a note. “1Q results validate our investment argument on both counts, and we reiterate our preference for TCS over Infosys," they added.

TCS said after market hours on Thursday net profit in the June quarter rose 21 percent to Rs1,840 crore ($395 million) from Rs1,520 crore a year ago under US accounting standards.

Rival Infosys Technologies, which had reported a rare drop in quarterly profit on Tuesday, gained 0.1% while third-ranked Wipro rose 0.6%.

Traders said other stocks were weighed down by concerns about the global economy.

Ambareesh Baliga, vice-president of Karvy Stock Broking, said foreign funds that have poured have poured $8.4 billion into Indian stocks this year could pull out if global indicators worsen.

“We are now concerned about the slowing down effects of Chinese economy and fears of a double-dip recession in the US," he said. “On the domestic front, industrial output and inflation are worries."

Lenders were mixed on expectations loan demand would pick up on the back of robust economic growth.

Top lender State Bank of India and rival ICICI Bank were up 0.8% and 1.6% respectively. HDFC Bank was down 1.2%.

In the broader market, gainers led losers in a ratio of 1.6:1 in a volume of 137 million shares.

Elsewhere, Japan’s Nikkei was down 2.9% while MSCI’s measure of Asian shares other than Japan shed 0.5%.

STOCKS

Private-sector lender Axis Bank hit a record high at Rs1,360.95, after it said on Thursday its April-June net profit rose 32 percent.

The stock was later trading 0.4% higher at Rs1,350.

Suzlon rose 0.3% to Rs60.30 as it said the wind turbine maker said it had got a 19.2 megawatt order from a local ayurvedic research foundation.

Technofab Engineering debuted on the BSE at Rs272, up 13.3% versus its issue price of Rs240.

The shares rose further and were trading at 293.25.

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Published: 16 Jul 2010, 11:24 AM IST
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