Late sales eliminate 83 points from Sensex

The market was under pressure from sellers in late-afternoon trade. Frontline software scrips and a select few heavyweights led the fall. Volatility was also a key feature of today's trade.

The 30-share BSE Sensex settled 82.54 points lower, at 13,613.04, as per a provisional closing . It had opened higher, at 13,733.18, and surged up to 13,755.76, but was unable to sustain the level and slipped. The benchmark Sensex had also slipped to a low of 13,581.04, due to last minute selling.

After rallying for the past few days, the market-breadth, an indication of the overall health of the market, turned weak, as selling began for smallcap and mid-cap stocks. Against 1,459 stocks that declined on BSE, 1,112 advanced. A total of 78 scrips remained unchanged.

The total turnover on BSE amounted to Rs 4547 crore.

Among the 30-Sensex pack, 22 declined while the rest advanced.

Frontline IT stocks were trading with sharp losses, as selling gripped their counters on fears of a rising rupee against the dollar.

Software major Satyam Computers was the top-loser, down 4.66% to Rs 457, on a volume of 12.75 lakh shares. It had slipped to a low of Rs 454.10.

TCS slipped 2.15% to Rs 1253, as 6.77 lakh shares changed hands in the counter on BSE. An anticipated increase in core operating profit margins did not fructify in Q4 March 2007.

TCS reported 6.16% growth in sequential consolidated net profit as per US GAAP for Q4 March 2007 at Rs 1172.77 crore, compared to a net profit of Rs 1104.70 crore in Q3 December 2006. However, operating profit margin (OPM) did not rise. Analysts had bet on an increase in the IT major's OPM, which was steady at 28.3%. Consolidated US GAAP revenue rose 5.88% to Rs 5146.37 crore.

“The significant number of large wins in FY 2007 that will ramp up during the next fiscal year makes us confident of continuing sustained, profitable growth," S Ramadorai, chief executive and managing director, said in a statement.

TCS added 43 new clients during the January-March quarter, taking their total number to 218. TCS also hired 5,827 new employees during the quarter. The company plans to give 12 - 15% pay hike to its staff based in India, while overseas employees will see their salaries increase 3 - 5% this year.

The rupee’s surge is a cause of concern for IT firms, as it directly impacts their revenue and profits, a lion’s share of which is accounted for by exports. IT companies use hedging tools to mitigate risks associated with currency movements. TCS is said to have obtained a $1 billion hedge at a price range of 43.50 - 44.

Infosys (down 2.30% to Rs 2079.80) and Wipro (down 1.91% to Rs 575.40) were also unable to win favour.

The BSE IT Index shed 127.38 points (2.47%), to 5,022.90, and was the biggest loser among the sectoral indices on BSE.

The rupee continued its upward march and appreciated further to 41.85/87 against the dollar following sustained portfolio inflows amid absence of intervention from the central bank. In volatile trade at the Interbank Foreign Exchange (Forex) market, the Indian unit opened steady at 41.91/93 per dollar from Monday's close of 41.90/92 a dollar.

India's foreign exchange reserves rose above $200 billion for the first time in April, indicating robust foreign fund inflows, which ultimately had a negative impact on the dollar sentiment.

Maruti Udyog (down 1.92% to Rs 762.40), Cipla (down 2.12% to Rs 230.50), and Tata Motors (down 2.65% to Rs 730.50) were the other losers.

Bajaj Auto was the top-gainer, up 2.95% to Rs 2554, on a volume of 49,896 shares. The bike-maker surged sharply from a low of Rs 2460.20.

Previously battered cement pivotals are back in the reckoning, on expectations of a strong performance from cement firms in the March 2007 quarter.

ACC was up 2.85% to Rs 809, on a volume of 5.97 lakh shares, while Gujarat Ambuja Cements rose 1.47% to Rs 113.90.

Cement shares were hammered in the last few months after the government took steps to rein in cement prices to fight inflation. Most brokerages have a 'buy' on Grasim, as it is a diversified firm not relying solely on cement, unlike many others.

Index heavyweight Reliance Industries (RIL) was up 1.24% to Rs 1478.10, on volumes of 10.45 lakh shares. It had surged to an all-time high of Rs 1487.80, in intra-day trade.

The Nikkei average slipped 0.77% on Tuesday, as investors took profits in Kyocera Corp and other recent gainers while Casio Computer Co. Ltd. tumbled after Goldman Saches downgraded the stock. The Nikkei lost 136.38 points at 17,491.92

US stocks edged up on Monday, buoyed by a $25 billion buyout of student-lender, Sallie Mae, and following strong retail sales in March renewing optimism about economic growth. The Dow Jones industrial average shot up 108.33 points, or 0.86%, to end at 12,720.46 -- within shouting distance of its record-high of 12,795.93 set on 20 February 2007. The S&P 500 gained 15.62 points, or 1.08%, to close at 1,468.47. The Nasdaq Composite Index advanced 26.39 points, or 1.06%, to finish at 2,518.33.

The release of US retail sales data, which slightly exceeded forecasts for March, and were much higher in February, gave investors another reason to return to riskier assets like stocks. The data indicated that consumer spending, a pillar of strength in the US economy, remained strong.

Stocks across the globe have surged in the past few weeks amid growing confidence that the benign backdrop of solid global economic growth and moderate inflation will continue.

As per provisional figures, FIIs were net buyers to the tune of Rs 308 crore on Monday.

Oil prices were flat in Asian trading on Tuesday on a lack of driving factors ahead of the expiry of the contract this week. Traders were looking ahead to the midweek US petroleum inventory report, which is likely to show rising crude stocks and falling gasoline and distillate supplies, according to a Dow Jones Newswires survey of analysts.

Light, sweet crude for May delivery was down just 3 cents to $63.58 a barrel in Asian electronic trading on the New York Mercantile Exchange. Slow trading is not unusual ahead of a contract's expiration. The May futures contract expires on Friday.

The Brent contract for June delivery, on London's ICE Futures exchange, was showing more movement Tuesday, up 32 cents to $67.57 a barrel.

From Monday (16 April), stock exchanges have also started releasing provisional data of daily activity of domestic institutional investors (DIIs) which include mutual funds, insurance companies, development financial institutional investors and banks. DIIs were net buyers to the tune of Rs 18 crore on Monday.