Mumbai: Belying all expectations, a better-than-expected industrial growth for November and promising third quarter earnings by trend-setter Infosys failed to cheer the markets and the benchmark Sensex on Tuesday closed down by over 100 points.
After opening higher, the 30-share Sensex fell by 104.20 points to 17,422.51 to settle the day. It dipped to day's low 17,392.55 but managed to recover some of the losses.
Brokers said markets were weighed down by heavy selling in banking stocks after SBI Chairman O P Bhatt yesterday warned that banking system could come under strain due to rising bad loans. Interest rate sensitive realty stocks took a heavy beating. Besides, metals shares also came under intense pressure.
They said anticipation of immediate hike in interest rate also worried investors. Reatly stocks were particularly hit because credit flows could be squeezed to the sector in view of rising defaults in bank loans, they added.
The key index has lost lost nearly 175 points in last three trading sessions.
The National Stock Exchange index Nifty also dropped 39.00 points to 5,210.40, after moving between 5,300.50 and 5,200.95 points during the session.
Marketmen said a mixed Asian trend and lower opening in European stocks also partly influenced the sentiment.
The realty sector index suffered the most by losing 3.10 per cent to 4,048.47, followed by metal index at 2.30 per cent to 17,789.47.
The banking index fell 1.96 per cent to 9,967.18 after SBI, the biggest lender, slid Rs 64.30 to Rs 2,203.25, on reports the industrial production grew at the fastest pace in 25 months, giving policy makers room to start withdrawing last year’s record interest-rate cuts. ICICI Bank, a largest private bank fell by Rs 26.80 to Rs 842.20.
However, gains in two heavyweights -- Reliance Industries and Infosys Technologies - saved the market from any major fall. Both carry a 24 per cent weightage on the Sensex.
Infosys gained Rs 98.90 to Rs 2,587.45 after the country's second largest software company reported better-than-expected 2.7 per cent sequential growth in net profit at Rs 1,582 crore in the third quarter.
Tata Consultancy Services rose by Rs 34.85 to Rs 749.10 and Wipro by Rs 32.35 to Rs 694.55.
Driven by the more than expected Infosys earnings, the BSE IT index surged by 3.91 per cent followed by tech counter at 2.21 per cent.
The IT bellwether also raised its earnings and revenue guidance for the fourth quartet both in rupee and dollar terms, which attracted good buying interest and the counter ended up by 3.97 per cent despite rise in the rupee value.
As a result most of IT counters attracted heavy buying interest and the BSE-IT Index spurted by 195.35 points or 3.91 per cent. Infosys surged by 3.97 per cent after hitting an intra-day high of nearly 4.5 per cent.
However, the IT index gain was lead by Wipro, the third largest software exporter, that flared up by 4.89 per cent, TCS surged by 4.88 per cent, HCL Tech by 3.68 per cent, Mphasis by 2.05 per cent and Oracle by 1.99 per cent.
Among the Sensex losers, DLF was the biggest loser with a 3.86 per cent decline, followed by RComm 3.49 per cent, Tata Steel 3.42 per cent, Sterlite 3.18 per cent, ICICI Bank 3.08 per cent, SBI 2.84 per cent, RelInfra 2.46 per cent, Hindalco 2.36 per cent, ITC 2.30 per cent, JP Associated 2.15 per cent, Bharti Airtel 2.07 per cent and ONGC 1.94 per cent.
The trading volume was relatively up at Rs 6,203.09 crore from Rs 6,124.96 crore on Monday. Think Soft topped the turnover list with Rs 179.45 crore, followed by Satyam (Rs 154.07 crore), SBI (Rs 142.22 crore), Infosys (Rs 141.23 crore) and RIL (Rs 137.54 crore).
First Published: Tuesday, January 12, 2010, 17:45