Having remained the largest private sector employer for decades, the Indian information technology (IT) services sector is perhaps set for a change as three of its largest companies — Tata Consultancy Services (TCS), Infosys and Wipro, have remained slow on hiring in the past few years, hinted at bottom fishing of workforce and ‘restructured’ their senior-level staff.

According to experts, the shift in technology landscape and the resultant change in demand from clients is the major reason for this swing.

Benchmark indices are trading lower, amid weakness in their Asian peers, dragged by losses in information technology and oil shares. Further, contraction in Index of Industrial Production for October to 4.2% also dampened sentiment.

At 9:30 AM, the 30-share Sensex was down 121 points at 27,241 and the 50-share Nifty was down 28 points at 8,196.

Tata Consultancy Services expects its revenue for the financial year’s third quarter ending December 31 to be in line with seasonal trends. Traditionally, the third and fourth quarters are weak for information technology companies in terms of growth, due to holidays and furloughs. Telecom and smaller verticals will grow better than the company average, said Rajesh Gopinathan, chief financial officer, updating analysts about the business for the third quarter.

According to the company, retail, manufacturing and hi-tech will see the impact of holidays and furloughs during the quarter. Banking, financial services and insurance (BFSI) will continue to see weakness due to insurance and products.

Tata Consultancy Services (TCS), India’s largest information-technology services player, is learnt to be undergoing a restructuring exercise. The workforce optimisation programme, in the planning stage, is expected to be over in February 2015.

According to company sources, every vertical has been asked to identify senior staff who have not been very productive. Employees who have been put under the scanner are above the rank of consultant — senior consultant, principal consultant, vice-presidents, etc.

ITC, a fast moving consumer goods (FMCG) major, has become the second-most valuable Indian company, surpasses refineries giants- Oil and Natural Gas Corporation (ONGC) and Reliance Industries - in overall market capitalization (m-cap) ranking.

ITC with a m-cap of Rs 3,15,797 crore at 1014 hours, was climbed to number two position ahead of ONGC and Reliance Industries having m-cap of Rs 3,14,842 crore and Rs 3,09,596 crore respectively. Information technology giant Tata Consultancy Services (TCS) is at number one position with Rs 495,479 crore m-cap.

Uncertainty looms over the fate of Tata Consultancy Services’ (TCS) $2.2-billion contract with UK-based Friends Life Group with Aviva, the UK’s second-largest insurer, saying it is buying out Friends Life in a $8.8-billion deal.

TCS, India’s largest information technology (IT) service provider, had bagged the contract in 2011 for a period of 15 years through its UK-based business process outsourcing unit Diligenta.

Markets recovered from day lows as strength in Infosys, L&T and Sun Pharma managed to cap losses in HDFC twins, TCS and Bharti Airtel. At 1045 hrs, the Sensex was down 185 points at 27,994 and the Nifty was down 13 points at 8,370.

However, the broader markets gave off their morning gains and turned flat with a positive bias. The midcap index was up 0.2% while the smallcap index was near yesterday's close.

The benchmark BSE Sensex breached 28,000-mark for the first time and the NSE Nifty hit a new peak of 8,363.65 in early trade today on sustained fund inflows amidst optimism over encouraging corporate earnings.

The 30-share index flared up by 141.57 points, or 0.50 per cent, to hit a new peak of 28,001.95, surpassing previous intra-day record of 27,969.82 reached on Monday. The gauge had shed 5.45 points in the previous session. Markets remained closed yesterday on account of “Muharram”.

Benchmark indices are trading weak after paring early morning gains, ahead of a truncated trading week, with gains in information technology and metal shares offsetting some of the losses posted by auto and consumer durable shares.

At 10:30 AM, Sensex was down 17 points at 26,849 while Nifty was down 9 points at 8,313. In the broader market, BSE Mid cap and Small cap indices have gained around 0.8% each. Market breadth is positive with 1,408 gainers, as against 820 declines.

Benchmark indices are trading flat with a negative bias as the advance in IT shares is being offset by losses in auto shares which are down on weak Ocotber sales data.

At 9:17 AM, Sensex was down 19 points at 27,846 while Nifty was down 8 points at 8315.

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