The benchmark indices fell prey to the latest wave of uncertainty to grip the global bourses, negating the strength of last week and the apparent stability witnessed on Monday. The pounding metted to the IT counters in wake of the not-so-enthusing results from the TCS and HCL Tech counters has only exacerbated matters. The Sensex broke the psychological 17,000 level to end the day at 16,748, weaker by 276 points and the Nifty shut shop at 5037, down 80 points. The midcap index ended at 6114, lower by 75 points and the smallcap index ended at 6854, down 68 points.
Wall Street had suffered its worst loss in two weeks on Monday after comments from Germany's finance minister caused investors to fear Europe's solution to its debt crisis may not come fast enough. The Dow ended down 246 points and Nasdaq shed 52 points. And Moody's warned that it may give a negative outlook on France's Aaa credit rating in the next three months if the costs for helping to bail out banks and other euro zone members stretch its budget too much.
The Asian markets understandably went into a tailspin; Hang Seng shed more than 4%, while Shanghai, Nikkei, Straits Times and Taiwan lost 1-2% each. The European markets dampened global sentiment further; the CAC, FTSE and DAX were down about a percent each in mid-day trades.
On the results front, TCS failed to meet market expectations in reporting a 6.1% jump in consolidated net profit to Rs 2,301 crore for the second quarter ended September 30, 2011 as against Rs 2,169.21 crore for the July-September quarter last year.
HCL Technologies was also unsuccessful in meeting estimates as it reported 2.7% quarter-on-quarter drop in its consolidated net income to Rs 496.70 crore in first quarter ended September 2011, as per US accounting standards. Consolidated sales climbed 8.2% to Rs 4,651 crore on a sequential basis. Consolidated sales, however, climbed 8.2% to Rs 4,651 crore on a sequential basis.
However, Patni Computer Systems was able to script a turnaround, reporting a consolidated net profit of Rs 90.27 crore in the third quarter ended September 2011, against a net loss of Rs 51.52 crore at the end of the first quarter ended June, due to lower staff cost. The total income grew by 2% at Rs 892 crore on a quarter-on-quarter basis.
TCS received the brunt of pounding among the IT stocks, diving by a whopping 7.3% at Rs 1037. Among the other IT biggies, Wipro weakened by 3% at Rs 346 and Infosys shed 1.6% at Rs 2703. In the broader IT universe, HCL Tech crumbled by 8.7% at Rs 400 and Mphasis slumped by 5.6% at Rs 320. Patni Computer Systems was an exception, vaulting by 15% at Rs 337 on the back of a stellar set of numbers.
Metals also lost sheen, with Hindalco losing 3.6% at Rs 125, Sterlite weakening by 3.2% at Rs 116 and Tata Steel losing 2.7% at Rs 427.
Index heavyweight Reliance Industries (RIL) extended Monday's losses triggered by weak Q2 operating performance to shed another 1.6% at Rs 819.
Coal India bucked the overall trend to gain 2.6% at Rs 329 on reports that workers called off their proposed three-day strike after the management assured a bonus of Rs 20,000 and an additional Rs 1,000 bonus for Diwali. Hero Motocorp added 0.4% at Rs 2001 and
The overall market breadth was extremely negative as 1,764 stocks declined while 977 stocks advanced.
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