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Shares edge up; Wipro drops on muted outlook

Shares edge up; Wipro drops on muted outlook
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First Published: Wed, Apr 27 2011. 11 52 AM IST
Updated: Wed, Apr 27 2011. 11 52 AM IST
Mumbai: Shares were trading slightly higher on Wednesday supported by firm Asian peers, but the mood was downbeat after No. 3 outsourcer Wipro’s outlook disappointed investors and sent the stock down more than 4%.
Investors were also wary ahead of the expiry of monthly derivatives contracts on the National Stock Exchange on Thursday, and a widely expected rate increase by the central bank next week.
Wipro, which gets most of its revenue from exports, forecast muted growth for its mainstay information technology services business and said wage hikes would hurt operating margins this year.
At 11:26am, the 30-share BSE index was up 0.05% at 19,555.51 points, with 18 components advancing. It had briefly skidded into negative territory at one stage.
“With Fed meet today, expiry tomorrow and the central bank’s policy statement due next week, the market will continue to be choppy for a while,” said Neeraj Dewan, director of Quantum Securities.
The benchmark BSE index is up nearly 10% since the end of February, after foreign funds pumped in $3.4 billion in the period.
The 50-share NSE index was down 0.1% at 5,867.50 points. In the broader market, gainers were twice the number of losers on volume of 138 million shares on the NSE.
Oil & Natural Gas Corp gained 1.8% after Goldman Sachs raised the stock to buy from neutral, based on stable to improving oil realizations and volume growth and attractive valuations.
Wipro was down 3.5% at Rs 448.60, after falling as much as 4.4% early. “Wipro’s guidance was not good, and that is dragging the stock down,” Dewan said.
Financials dropped ahead of the central bank’s monetary policy statement due on Tuesday.
The Reserve Bank of India is seen raising rates by a quarter point at the policy and analysts now expect it to raise rates by a total of 75 basis points for the rest of 2011, or 25 basis points more than they expected in mid-March, a new Reuters poll found on Tuesday.
State Bank of India , ICICI Bank and HDFC Bank fell between 0.3% and 0.4%.
Energy major Reliance Industries slipped 0.2% after Goldman Sachs cut the stock to neutral from buy and removed it from its Asia Pacific Conviction list on concerns about lack of clarity on its sustainable growth drivers, implying limited scope for medium-term earnings surprise.
The MSCI’s measure of Asian markets other than Japan was up 0.5%, while Japan’s Nikkei rose 1.4%.
Ambuja Cements was down 2.5% at Rs 153.85 after the cement maker said late on Tuesday its March quarter net profit fell 12%.
Air express courier firm Blue Dart jumped 8.6% to Rs 1,500.10, after its January-March profit rose 52% from a year ago.
Clariant Chemicals was up 2.6% at Rs 726.60 after the specialty chemicals maker said its March quarter net profit soared to Rs 220 crore from 325.3 million a year ago.
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First Published: Wed, Apr 27 2011. 11 52 AM IST
More Topics: Markets | Oil | Wipro | Q4 | Profit |