Defying positive global sentiments on Tuesday, the domestic equity bourses, led by frontline IT sector stocks, under performed their global peers. Market experts say that the fears of economic recession due to a fall in US non-farm payrolls resulted in IT heavy weights losing ground on the domestic equity bourses for the second consecutive day. The hardening of rupee against the US dollar had affected these IT sector stocks adversely in the last few months as majority of their revenues is derived from the US. Now with the latest data released in US showing shrinking US payrolls during August 2007 for the first time in four years, investors have turned negative on the IT counter as investors believe that a recession in US economy could impact these IT companies.
As a result, the BSE IT Index was the biggest loser among the sectoral indices, which fell by 2.19 %, or 100.33 points, to close the day at 4,470.56 points. Wipro was down by Rs 11.45, or 2.45%, at Rs 455.50, Infosys Technologies was down by Rs 48.30, or 2.58%, at Rs 1823.20, TCS was down by Rs 23.10, or 2.21%, at Rs 1,023.85 and Satyam Computers was down by Rs 9, or 2.04%, to close the day at Rs 433.25. The BSE IT Index has under performed the broader market over the last one month, declining by 6.36% when compared to the Sensex return of 4.54%. Anil Advani, head of research, SBICAP Securities, said, ?Uncertainties at the global and domestic level are still haunting the Indian stock markets. Overall, if we see the movement of Indian markets in the last two days, they have reacted to the macro-economic factors in the US economy. On Tuesday, the IT sector too played its part in bringing down the market.?
The 30-share Sensex of the Bombay Stock Exchange (BSE), after opening the day on a firm note at 15,668.40 points, ended the day at 15,542.77 points losing 54.06 points or 0.35%. On the other hand, the broader S&P CNX Nifty of the National Stock Exchange (NSE) ended the day at 4,497.05 points losing 10.8 points or 0.24%. According to the provisional figures provided by the stock exchanges (SEs), foreign institutional investors (FIIs) were net buyers to the tune of Rs 256.59 crore on Tuesday.