IT stocks drag markets; broader indices showcase their mettle

The key benchmark indices have lowered further due to profit-booking at higher levels as investors turned cautious after IT bellwether Infosys reported lower than expected Q4 earning's, the extended decline of the market bellwether Reliance Industries (RIL) too weighed on the sentiment. The discouraging global cues and the rise in the international crude prices are the other factors that have added to the trader's gloom as Asian shares after a mixed start have majorly surrendered to the selling pressure barring Jakarta Composite that is trading tad above neutral line. While, US markets closed flat on Thursday on some weak economic reports which weighed on investor's sentiment.  The US futures were trading mixed on the screen trade.

Back home, stocks from Auto space continued to gain investor's interest followed by, Banking and Metal counters, however, selling pressure had aggravated on the BSE Sectoral front with, stocks from IT, TECk and Oil and Gas plodding into red. The broader indices following their larger peers for past few sessions had began to show their mettle and were trading up by 0.25% each. The benchmark indices though were trading in red but had lost their physiological level of 19500 (Sensex) and 5800(Nifty) mark respectively. The overall market breadth on BSE was in the favour of advances which were currently outnumbering declines in the ratio of 1321:1086, while, 96 shares remained unchanged.

The BSE Sensex is currently trading at 19,514.19, down by 182.67 points or 0.93%.  The index has  touched a high of 19,700.96 and a low of 19,474.35. There were 13 stocks advancing against 17 declines on the index.

The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices gained 0.29% and 0.37%, respectively.

The gaining sectoral index on the BSE were, Auto up by 0.65%, CG up by 0.43%, Bankex up by 0.15%and Metal up by 0.12%. While IT down by 5.02%, TECk down by 3.64%, Oil and Gas down by 1.05% and Power down by 0.77%, and FMCG down by 0.37% were the top losers on the index.

The top gainers on the Sensex were Hero Honda up by 3.27%, L&T up by 2.28%, Hindalco up by 1.48%, Bharti Airtel up by 1.28% and JP Associates was up by 1.02%.

On the flip side, Infosys down by 7.44%, Wipro down by 4.16%, ONGC down by 1.94%, TCS down by 1.90% and NTPC down by 1.46% were the top losers on the index.

Meanwhile, the Indian government on Thursday indicated that while the formation of the competition commission of India (CCI) was aimed at ensuring ethical business play and controlling monopolies and restrictive trade practices, it will take care of legitimate concerns of India Inc on road blocks to mergers and acquisition (M&A).  Corporate affairs minister Murli Deora said in this connection that government was aware of concerns expressed by the industry and will ensure that competition rules do not lead to unnecessary red tape. He explicitly stated that final rules for M&A could include a minimum threshold for reporting buying of assets including shares by firms, a proposal that has seen strong backing by forms across various industries.

Deora has also convened a meeting with industry leaders on 25th April at Mumbai to ensure that concerns of the corporate world are accommodated while framing competition rules. The meeting has been called after he had discussion with corporate affairs secretary D K Mittal and Chairman of CCI Dhanendra Kumar on concerns raised by the India Inc on regulations of merger and acquisition by the Commission. The minister assured that there would be no disruption in the activities of corporate India when the new norms kick in at the start of June.

He also assured that there will be wide consultations with India Inc through proposed interactive meetings at Mumbai, Bangaluru, Ahmedabad, Hyderabad, Chennai, Kolkata and Delhi and his ministry will ensure a smooth transition from 1st June, 2011 regarding regulation of merger and acquisition in the country. The move, according to analysts, will make India at par with other economies including China and Brazil where such regulations have already come into force.

The S&P CNX Nifty is currently trading at 5,854.60, lower by 56.90 points or 0.96%. The index has touched a high and low of 5,907.35 5,847.20 respectively. There were 17 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were Hero Honda up by 3.28%, L&T up by 1.72%, Hindalco up by 1.41%, Bharti Airtel up by 1.13% and JP Associates up by 1.07%.

Infosys down by 7.43%, Siemens down by 6.00%, Wipro down by 3.99%, HCL Tech down by 2.48% and ONGC down by 2.16% were the major losers on the index.

Asian markets were trading mostly in the red; Shanghai Composite declined 0.61%, Hang Seng lost 0.35%, KLSE Composite shed 0.32%, Nikkei 225 shrugged off 0.60%, Straits Times dropped 0.25%, Seoul Composites skid 0.51%  and Taiwan Weighted was down by 0.73%.

On the flip side, Jakarta Composite was up by 0.05%.

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