IIP fails to dampen buoyant mood

The Indian indices began the day's proceedings below the dotted line. However, markets bounced back in the afternoon session on account of intensified buying activity witnessed at lower levels. The gains in the Indian markets continued until the final hour of the day's trading session. The markets closed on a strong note with gains across the sectors. The BSE-Sensex and NSE-Nifty ended the day with gains of around 490 points and 125 points respectively. Stocks from the mid-cap and small-cap space ended with gains of 0.9% and 1.3% respectively.
Other Asian markets ended the day on a mixed note. The European indices are currently trading firm. Rupee was trading at 49.32 against the US dollar at the time of writing.
The index of industrial production, which is the most widely followed gauge of industrial performance, declined by 2.3% in March as compared to a rise of 5.5% during the corresponding month in 2008. The drop has come mainly on account of poor performance by the manufacturing sector, which contracted by 3.3% during the same period under consideration. While the mining sector reported a dismal growth of 0.4%, electricity output was higher by a decent 6.3%. In FY09, industrial output reported a meager growth of 2.4% as compared to 8.5% reported in FY08.
As per a leading business daily, telecom operators are expected to issue multi-year BPO contracts during the next few months. The operators are expected to consolidate their outsourcing contracts to fewer vendors in order to insure greater quality control. Firms like Tata Teleservices and Idea Cellular have already invited new bids from the BPO firms, which will be around Rs 1.5 bn each. Besides existing players expanding their services into new circles or launching new services, IT outsourcing demands will also come from the new operators that are being lined up to start their operations. It is expected that outsourcing services from the telecom sectors are expected to grow to Rs 28 bn by FY12 from Rs 7 bn in FY08. Stocks from the telecom sector closed mixed.
As per a leading business daily, NIIT India Ltd's premier IT training company has bagged a contract worth Rs 844 m from the Gujarat education department to provide computer-aided learning in 1,870 high and higher secondary government schools within the state. The contract will cover 900,000 students in classes 9-12. NIIT had earlier won contract from the state governments of Rajasthan, Maharashtra, Andhra Pradesh and Bihar to provide training in schools. The education contract with the Andhra Pradesh government was one of the largest turn-key IT education contracts in the school segment. The school learning solutions business segment accounts for 13% of total revenues. Of the total revenues of this business segment, nearly 70% comes from government schools. The management has indicated that this segment is expected to grow at 40% going forward. The stock ended the day's session on a firm note.