Record drop in IT index; Sensex, Nifty also down

The cut in annual earnings forecast by Infosys Technologies took its toll on the stock markets on Wednesday with both Sensex and NSE-50 indices falling below their psychologically crucial 15,000 and 4,400 levels.

The BSE IT Index, which tracks the movement of IT stocks, dived by 3.34 per cent (168.22 points), the biggest single day fall in the index in several months, after investors and analysts anticipated similar cuts in earnings forecast by other IT biggies, including Tata Consultancy Services, Wipro and Satyam Computers.

The Sensex closed at 14,910.62, down 0.66 per cent (99.26 points), while the broader NSE-50 slid 0.4 per cent (18.90 points) to close at 4,387.15.

Infosys shed 4.5 per cent or Rs 90.25 to Rs 1,929.7 after it lowered annual sales to Rs 162.38 billion, compared to the earlier estimate of Rs 170.38 billion. Similarly, the company cut its net income a share to Rs 78.2-79 from the April forecast of Rs 80.29-81.58 a share.

Negative news flow from Infosys spilled over to other software stocks. TCS, India's largest software services company, shed 3.3 per cent or Rs 39.6 to Rs 1,146.9. Wipro Ltd, the third-biggest, dropped 2 per cent (Rs 10.5) to Rs 510.25.

Satyam Computer Services Ltd, the fourth-ranked, wiped off 3.3 per cent (Rs 16.3) to Rs 480.85. The four software stocks were the biggest losers among the 30 companies that comprise the Sensex.

Real-estate stocks, however, bucked the trend with the newly-launched BSE Realty Index registering its biggest single-day rise since its launch on Monday.

The index gained by 3.38 per cent on big buying in major counters including DLF Ltd. Its shares gained by 3.27 per cent to Rs 590.45, while Unitech, the second biggest property developer, rose by 3.06 per cent to Rs 592.20. Indiabulls Real Estate shot up by 7.03 per cent to Rs 501.40.