Mumbai: Markets fell Wednesday as weak earnings forecasts sparked selling in benchmark index stocks. India’s third largest software services provider Wipro plunged after the company said its revenues from IT services might rise by just 2% in the second quarter. The weak sales forecast confirmed the investors’ fears about a deteriorating business environment.
Concerns about inflation and its eventual impact on the economy also weighed on the investors mind. The planning commission’s deputy chairman Montek Singh Ahluwalia said it would take several months to reduce inflation to an acceptable level.
Finance minister Pranab Mukherjee also voiced concern about inflation and said that it could remain high until end of this year.
Sensex: 18,502 0.81%
Nifty: 5,567 –0.83%
Wipro, Hindalco, Ranbaxy Laboratories, JP Associates and Kotak Mahindra Bank led the fall in Nifty shares.
Wipro: Rs 398 –4.14%
Hindalco: Rs 178 –3.41%
Ranbaxy Laboratories: Rs 534 –2.59%
JP Associates: Rs 75 –2.51%
Kotak Mahindra Bank: Rs 489 –2.31%
At the sectoral level, power, healthcare, capital goods, automobiles and banking stocks led the losses on the BSE. Except FMCG, all BSE sectoral indices closed the day with losses.
BSE Power: 2,556 –1.73%
BSE Healthcare: 6,392 –1.71%
BSE Capital Goods: 13,491 –1.45%
BSE Auto: 8,735 –1.42%
BSE Bankex: 12,763 –1.34%
Crompton Greaves tanked for a second consecutive day after the company reported a 59% drop in first quarter profits. The weak results and subdued outlook given by the company led to selling in other power equipment manufacturers such as Havells India.
Crompton Greaves: Rs 176 –14.78%
Havells India: Rs 365 –5.95%
BGR Energy: Rs 463 –2.95%
Areva T&D: Rs 252 –2.83%
ABB: Rs 860 –2.69%
Meanwhile, shares of Petronet LNG hit a new high of Rs 154 after the company reported a 130% growth in June quarter profits. While net sales rose by 75%, higher volumes helped the company report a sharp rise in profits.
Petronet LNG: Rs 153 +3.27%
Overall, 56.12% of the shares traded on the BSE closed the day with losses.