Sensex ends down 344pts

The Sensex finally ended (provisonal) at 18,377 - down 344 points. Nifty ended down 101 points at 5,514.
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(Updated at 1434 hrs)

Markets have extended losses on continued weakness in IT stocks. The Sensex dropped to a low of 18,326 and was now hovering near that level at 18,394 - down 324 points or 2%. Nifty shed 95 points at 5,519.

The IT index has seen trememndous selling pressure after IT major Infosys came out with its numbers before market opening today.

IT bellwether Infosys slipped 5% to Rs 2,776 after reporting a 5.3% quarter-on-quarter decline in consolidated net profit at Rs 1,722 crore for the first quarter ended June 30, 2011 under IFRS.

The company had a net profit of Rs 1,818 crore in the March quarter of the previous fiscal (2010-11), Infosys said in a filing to the Bombay Stock Exchange. On a year-on-year basis, the company has reported a 15.7% growth in net profit.

"We are disappointed with the guidance. The company expects the full-year EPS in the range of Rs 128 – 130, as compared to the market expectation of Rs 132. This has caused the stock to fall sharply post results," said Sanjeev Hota, Asst. Vice President Research (IT), Sharekhan.

Meanwhile, a weak cues from global markets and changes in the political front also dampened sentiments.

The cabinet reshuffle saw seven ministers being dropped while eight new faces has joined the cabinet. However, Prime Minister Manmohan Singh has left the 'big four' -- Finance, Home, Defence and External Affairs -- untouched.

Asian markets slipped following cues from Wall Street after US markets suffered the worst day in a month. Concern about the stalemate in US budget talks and growing debt problems in the euro zone prompted investors to hedge against further losses. Hang Seng dropped 3%, followed by Seoul and Jakarta Composite. Markets in Spain, Austria and Italy were also down 1-3% each.

Meanwhile, industrial growth fell to 5.6% in May this year from 8.5% in the same month last year, mainly due to the poor performance of the manufacturing and mining sectors. According to data released here, industrial growth in April-May this year averaged 5.7%, compared to 10.8% in the same period last year.

Other than Infosys, Larsen & Toubro, HDFC Bank and HDFC exerted pressure on the benchmark - contributing to its fall.

Realty, auto and metal stocks were also in red. DLF, Tata Motors, Reliance Infra, Jindal Steel and Wipro are down 3-4% each. Market heavyweight, Reliance, is marginally in red at Rs 848.

BSE market breadth is negative. Out of 2,831 stocks traded, 1,996 have declined while 734 have advanced in trades.