BSE Sensex off record highs as tech stocks fall on revenue growth worries

Written by PTI | Mumbai | Updated: Mar 19 2014, 23:21pm hrs
BSE SensexBSE Sensex ends flat as shares IT outsourcing companies, led by Tata Consultancy Services, fall on concerns about revenue growth.
In choppy trade, the benchmark BSE Sensex today ended almost unchanged as gains in Housing Development Finance Corporation Ltd (HDFC), ITC and Tata Steelshares were countered by losses in IT stocks like Tata Consultancy Services (TCS) and Infosys, amid global markets turning cautious ahead of a closely-watched US Federal Reserve policy meeting.

After touching the day's high at 21,895.83 at the outset, the Sensex fell back to end with a negligible 0.25-point rise at 21,832.86. The gauge had dipped to 21,782.01 during mid-session on heavy selling in IT stocks.

Brokers said the sentiment was poor as IT stocks dropped on growth concerns while overseas investors awaited outcome of the US Fed's Federal Open Market Committee (FOMC) that will conclude its first meeting today after Janet Yellen succeeded Ben Bernanke as chair.

Tata Consultancy Services, the country's leading software exporter, plunged 3.94 per cent after analysts said the company has indicated revenue growth for the quarter ending in March to be weaker than the previous quarter.

"The company indicated that in line with seasonality, 4Q revenue growth will be weaker than 3Q, with the India business continuing to show a decline," said a note from Nomura.

The IT sector index suffered the most by losing 2.24 per cent as Sensex heaveyweight Infosys lost 2.39 per cent. Other tech losers were Tech Mahindra, HCL Technologies, Oracle Finance, Financial Technologies, Mphasis and Mindtree.

""Participants preferred to keep cautious stance on Wednesday, ahead of US Fed meeting outcome. As a result, the benchmarks were remained in a narrow range and closed flat in the end," Jayant Manglik, President-retail distribution, Religare Securities.

However, the broad-based NSE index Nifty managed to end higher by 7.40 points, or 0.11 per cent, at 6,524.05. The index shuttled between 6,541.20 and 6,506.00 intra-day.

Reliance Industries, ITC, SBI, Axis Bank, ICICI Bank, HDFC Bank, L&T, BHEL and Tata Steel gained, saving the market from plunging deep into the negative zone.

While IT, Teck, Oil and Gas, Realty and power sector indices fell, metal, FMCG, Bank, Capital Goods and Healthcare indices gained.

Check out Tuesday's (March 18) close:

BSE Sensex March 18, 2014


* BSE index closes flat; NSE index gains 0.11 pct

* Technology stocks fall; TCS closes 3.89 pct down

* Metal stocks gain; Tata Steel surges 4.67 pct

Indian shares end little changed; investors cautious ahead of Fed meet

(Reuters) India's benchmark BSE Sensex index ended flat on Wednesday, off the record highs hit a day earlier, as IT outsourcing companies fell on concerns about their revenues, while investors also booked profits in recent outperformers such as Oil & Natural Gas Corp (ONGC).

Shares of Tata Consultancy Services (TCS) fell as much as 5.1 percent after analysts cited the company as saying revenue growth from software services could be weakening from the previous quarter.

Global risk factors also weighed on Indian shares ahead of the U.S. Federal Reserve's policy review later in the day and as investors still monitor developments over Crimea and Ukraine.

Still, foreign investors, who have been driving the rally in this month, have stuck to India, buying a net $165.7 million worth of shares on Tuesday to mark their 21st buying session in the previous 22.

"Index continues to trade in a narrow range with high intraday volatility and extreme stock-specific actions," said Vinod Nair, head-fundamental research, Geojit BNP Paribas Financial Services.

Nair said this could signal a loss of momentum ahead of the general elections due next month.

Markets Top Gainers, Markets Top Losers

The benchmark BSE index ended up 0.25 points at 21,832.86, away from the record high of 22,040.72 hit on Tuesday.

The broader NSE index closed higher 0.11 percent, or 7.40 points, at 6,524.05, also off the all-time high of 6,574.95 in the previous day.

TCS shares ended down 3.89 percent after analysts cited the company as expressing caution about revenue growth in the current quarter at a briefing on Tuesday. The software services exporter declined to comment.

The comments came after Infosys Ltd Chairman Narayana Murthy warned last week that revenue for the fiscal year ending March could grow at the lower end of the company's 11.5 to 12 percent projection. Infosys shares fell 2.35 percent.

Investors also booked profits on recent outperformers. Oil and Natural Gas Corp closed 3.43 percent lower after surging 18 percent since the end of January to Tuesday's close.

Still, indexes received some support as investors continued to favour selective blue chips such as ITC and HDFC Bank.

ITC, which closed 1.07 percent higher, has advanced 9.8 percent this month, while HDFC Bank closed up 0.61 percent, bringing its gain for this month to 10.3 percent.

Investors also focused on beaten down sectors such as metals with Tata Steel gaining 4.67 percent, although shares are still down 16.4 percent this year.

Hindalco Industries closed 4.53 percent higher and Jindal Steel and Power ended up 1.46 percent.

Shares of Polaris Financial Technology surged 20 percent, their highest since July 2011. That added to the 11.6 percent gain on Tuesday, after the software services firm said its board had approved a split of the company into two businesses.


* Dollar firms before Fed verdict, all eyes on Yellen debut

* Brent near 6-week low as Ukraine worries ease; Fed in focus

* Shares slip ahead of Fed, investors eye Russia-Ukraine

* Foreign institutional investor flows

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