Shares lower on profit taking in old economy

Friday, 25 April 2003, 07:00 Hrs
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MUMBAI: India's blue-chip share market index ended lower for the third successive session Thursday on institutional profit taking in stocks of heavyweight old economy companies in the absence of any positive trigger.

A sharp fall in the market, however, was cushioned by a smart rally in technology stocks after IT industry bellwether Satyam Computer Services Ltd. projected better-than-expected growth outlook.

The stock market benchmark 30-share Bombay Stock Exchange sensitive index or Sensex closed at 2,937.23, a loss of 10.10 points or 0.34 percent from its previous closing session.

Analysts say the market mood continues to be lacklustre in the absence of any positive buying trigger.

"The corporate earnings season, which is entering into final phase now, has not made any difference to the market mood. Investors are looking forward to some positive trigger that can revive buying sentiment," said a market analyst.

"Today, the market witnessed lot of portfolio churning with investors pare their exposure in the old economy sector to pick up more technology stocks on Satyam's bullish revenue outlook," the analyst added.

The market index fell 0.5 percent last week after poor results and disappointing guidance from software bellwether Wipro, India's most valuable software company by market capitalisation, dented investor sentiment.

Stocks of companies such as Wipro and Infosys Technologies, India's largest listed software exporter, came under heavy hammering, triggered by fears that earning of top software makers might slow in the current fiscal.

Hyderabad-based Satyam Computer, however, boosted the market sentiment on technology counters Thursday by projecting a better-than-expected business outlook in the months ahead.

Satyam Computer, the nation's fourth largest software services exporter, forecast earnings per share of 15.65 to 16 in the current year, a growth of seven to10 percent from the past year.

Mirroring the sentiment, shares of Satyam closed with a gain of 6.6 percent at 159.65, after rising as much as 10.8 percent in the intra-day trade.

HCL Technologies, a New Delhi-based software development and services major, rose 4.6 percent to 149.60 and Infosys Technologies, India's largest listed software exporter, ended 0.6 percent higher at 2,898.75.

In the old economy sector, shares of Reliance Industries gained 1.2 percent to touch 273.85 on renewed buying support after the stock shed nearly two percent Wednesday despite announcing impressive quarterly results.

Reliance Industries, India's largest private sector business conglomerate, Wednesday said its fourth-quarter net profit rose 41 percent, helped by a rise in the prices of its products.

The company's profit for the fourth quarter ended March 31, 2003 touched 11.01 billion while gross sales rose 32 percent to 176.79 billion. The numbers, however, fell short of market expectations.

Consumer goods giant Hindustan Lever, on the other hand, fell nearly three percent to 136 and cement major Associated Cement Companies closed with a loss of 1.6 percent at 131.40.

Other major losers in the sector included HDFC, state-run Mahanagar Telephone Nigam Ltd., Hindustan Petroleum Corporation Ltd., Grasim Industries, and Larsen and Toubro.
Source: IANS
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