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Markets drop; Infosys down after record high

Markets drop; Infosys down after record high
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First Published: Fri, Oct 15 2010. 10 43 AM IST
Updated: Fri, Oct 15 2010. 10 44 AM IST
Mumbai: Indian shares skidded lower on Friday as investors booked profits ahead of a $3.5 billion IPO by state-owned Coal India next week that is expected to draw funds away from the market.
Infosys Technologies, the country’s second-largest outsourcer, raced to an all-time high after forecast-beating earnings but quickly fell as profit-taking kicked in.
“I would not read much into the fall,” said Prakash Diwan, head of institutional business at Networth Stock Broking. “Infosys has had a history of beating its own guidance and street estimates. So, people do tend to factor in that before results.”
At 10:28am, the 30-share BSE index was down 0.61% at 20,372.74 points, with 21 of its components declining.
The benchmark, which had started higher, is up 16.8% this year boosted by record foreign fund buying of $22.5 billion since the start of January.
Infosys was trading down 1% after rising as much as 2% to a record high of Rs3,249. The stock is up around 20% in the year to date.
The outsourcer raised its annual revenue forecast after it topped market estimates with a 13% rise in quarterly profit on rising outsourcing demand.
Bigger rival Tata Consultancy Services was down 2.5% after rising as much as 2.5% to an all-time high of Rs1,010.
“I think, it does show that IT spending cycle is stronger than some believed. For the larger companies, given Infosys results, we may see similarly good results,” said Vikas Pershad, CEO of Veda Investments in Chicago.
Coal India, the world’s largest coal miner, is set to open its initial public offering on Monday and the sale is expected to soak up foreign inflows and shift the spotlight to the primary market.
Investors were also circumspect ahead of September inflation data due by noon (0630 GMT), which could determine whether the central bank would tighten policy at its review on 2 November.
The wholesale price index probably rose an annual 8.5% in September, unchanged from its rise in August, a Reuters poll showed.
Top lender State Bank of India dropped 1%, while rivals ICICI Bank and HDFC Bank shed 1.3% and 0.3% respectively.
In the broader market, gainers and losers were nearly equal in number on volume of 116 million shares.
The 50-share NSE index was down 0.7% at 6,134.55.
Elsewhere, the MSCI’s measure of Asian markets other than Japan was down 0.5%, while Japan’s Nikkei fell 1%.
STOCKS ON THE MOVE
Eros International Media, a unit of Eros International, rose 2.1% to Rs180.50 after it signed a licensing deal worth 640 million rupees with Zee Entertainment Enterprises for exclusive broadcast of some of Eros’ films on Zee’s television network.
Suzlon Energy rose 0.9% to Rs58.80, after the wind turbine maker won orders for 168.5 megawatts of wind turbine capacity.
Sadbhav Engineering was up 0.5% at Rs1,540.25 after the construction firm said on Thursday it got a project worth Rs1,411 crore from National Highway Authority of India.
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First Published: Fri, Oct 15 2010. 10 43 AM IST
More Topics: Stocks | Market | Infosys | Financial Market | BSE |