Infosys, TCS extend losses as Sensex falls on profit taking
The BSE Sensex slumped over 200 points on Thursday as investors resorted to profit taking after days of gains. The Nifty, which has been trading in the "overbought" territory, with its 14-day relative strength index around 70, slipped below the key 5,850 mark.
IT stocks traded with over 2 per cent cut extending the losses to a third day. There are fears that fiscal 2014 growth may be muted after Cognizant's filing with U.S. market regulator indicated an expected dip in 2013 revenue growth. (Read: Is the heavy selling in Infosys, TCS justified?)
HCL Tech, India's fourth largest IT exporter, was the top loser on the 50-share Nifty, falling nearly 3 per cent. Infosys was down 2.6 per cent while TCS shares traded 2.1 per cent lower.
Only eight stocks -- including Jaiprakash Associates (up over 3.5 per cent, Bajaj Auto (up 1.4 per cent) and Reliance Infra (up 1.1 per cent) - traded higher on the Nifty.
Retail stocks traded flat to positive after the UPA government won the vote on Foreign Direct Investment or FDI in multi-brand retail in the Lok Sabha. Analysts said this was a crucial victory for the government and it's much needed reforms agenda. (Read: Retail stocks extend gains after UPA's win in Lok Sabha)
The Upper House will now debate and vote on FDI over the next two days starting today. The government is in a minority in the Upper House and will need the active support of the SP and the BSP to scrape through.
The government had opened its doors to foreign retailers in September as part of a package of measures to stave off a looming credit rating downgrade, cut a swelling fiscal deficit and revive the country's investment climate.
Shares in big retail chains like Shoppers Stop traded with over 3 per cent gains while Pantaloon Retail shares were flat.
Asian shares were steady near 16-month highs on Thursday, supported by hopes that U.S. lawmakers will reach a compromise to avoid the so-called fiscal cliff of year-end tax hikes and spending cuts which threaten to push the U.S. economy back into recession.
(With inputs from Reuters)