Infotech stocks crash, cyclicals bounce back

MUMBAI, MARCH 31: Shares which fell steeply in the opening session recovered most of the losses by close on Friday, as fund buying emerged...

MUMBAI, MARCH 31: Shares which fell steeply in the opening session recovered most of the losses by close on Friday, as fund buying emerged in old economy stocks. Technology stocks, however, remained beaten, tracking huge overnight losses on the Nasdaq Exchange of the US where caution about overheated valuations by global market experts rattled investors.

Sensex (BSE sensitive index), which crashed below the 4900 level once again, ended 0.79 per cent or 39.80 points down at 5,001.28, off the day’s low of 4,867.23. The National Stock Exchange’s S&P CNX Nifty index finished 1.38 per cent, or 21.40 points, lower at a provisional 1,528.10. “Indian stocks moved in line with the current global trend. Old economy stocks are the favourites once again while IT, telecom and media stocks crumbled,” said a dealer.

Dealers said the interest in cyclicals was likely to remain next week as well, unless a big recovery in tech stocks on the Nasdaq Exchange is seen. End-account and financial year-end considerations curbed position-taking by speculators on Friday, they said. Speculative activity is seen directed by earnings numbers expectations next week.

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Leading gainers were Reliance Industries which went up by 8 per cent, or Rs 23.25, at Rs 314.50, Telco Rs 10.00 at Rs 135.40, HPCL Rs 9.75 at Rs 131.75, ACC Rs 8.90 at Rs 140.40 and Grasim Rs 18 at Rs 303 on buying support. Other old economy stocks like Larsen & Toubro and SBI also moved up.

Among technology shares which ended at the lower eight per cent circuit limit were Infosys Technologies at Rs 8,901.95, Rolta India at Rs 574.05 Wipro at Rs 5,493.15 and Satyam Computer at Rs 4,428.70. Other infotech/telecom stocks like Pentamedia, Silverline, HCL, Global Telesystems and HFCL also crashed on selling pressure.

Value buying was seen in some pharma shares amid expectations that the government might come out with some incentives for research and development, following reports that chiefs of several top firms were meeting the government officials in April. The sector had been beaten down after being neglected by the government in the federal budget last month. Dr Reddy’s Laboratories closed up eight per cent at Rs 1,120.95, Cipla eight per cent at Rs 1,611.60 and Sun Pharmaceuticals 5.61 per cent.