Dalal Street gets edgy ahead of Infosys results

STOCK REPORT

It was a volatile day for the markets on Tuesday as traders booked profits on the eve of the Q1 results from Infosys Technologies.

The benchmark Sensex ended above the 15,000 mark for the second consecutive day, despite losing 35.85 points (0.24 per cent) from yesterday to 15,009.

TCS (up 0.85 per cent to Rs 1,186.50), Infosys Technologies (up 1.35 per cent to Rs 2,019.95) and Satyam Computers (up 1.15 per cent to Rs 495.15) gained, while Wipro, India's third biggest IT firm, was the only loser among the top four. The stock was down 0.86 per cent to Rs 520.75.

There was some buying in auto stocks as well. IT and auto stocks, which had not participated in the Sensex rally from 10,000 to 15,000 due to concerns over the rising rupee and higher interest rates, are now beginning to show strength, analysts said.

The market players say there could be a positive surprise from Infosys tomorrow. The earnings Infosys and other IT firms may not narrow down to a larger extent as these companies have raised their prices to offset the currency appreciation effect, analysts said. TCS, Satyam and Infosys have gained by 3 to 5.5 per cent from last Tuesday.

Following the 12 per cent currency appreciation in 2007, the IT stocks have been losing value over the last few months. But the trend has shown a little shift since in the last few days as analysts expect the rising rupee not to affect the big IT firms, that have hedged the revenue risks.

The Sensex hit the day's high of 15,114.95 points and a low of 14,966.40, showing a swing of 148.55 points during the day. The broader S&P CNX Nifty managed to end above the 4,400 point mark, but lost 0.30 per cent from the previous close to 4,406 points.

Harit Shah, an IT analyst with Angel Broking said, "What we have been seeing is value buying. Though the rupee-dollar impact will not be very big, the bottom line of IT companies will drop by 2-3 per cent. The demand for IT has been good. This will continue to attract better pricing."

Tata Motors was the top gainer stock on the Sensex. It rose 4.03 per cent to Rs 744, followed by Maruti to Rs 813 (up 2.38 per cent). Hindustan Unilever grew 1.61 per cent to Rs 198.50, while Tata Steel reached Rs 633.95 (up 1.76 per cent).

Reliance Communications was the significant loser shedding 1.76 per cent to Rs 542.65. HDFC Bank, which posted 35 per cent rise in its net profits for the first quarter, lost 1.73 per cent to Rs 1,147.85. Grasim also figured in the loser's list, as the stock came down by 1.38 per cent to Rs 2,726.55. ICICI Bank, Reliance Industries, L&T were the other significant losers.

"Large-cap IT companies have fallen by 15-20 per cent. They have already seen the downside. Although Infosys has hedged a lot, we still expect a 3-4 per cent fall in its bottom line," Krupal Maniar, IT analyst at Emkay Share and Stock brokers, said.

Out of the total 2,710 shares traded at the BSE, 1,170 advanced, 1,467 declined while 73 remained unchanged.