Sensex tests: IT shares low on US recession fears

Indian markets were witnessing a sell-off across the board, in line with peers, as investors exited equities on fears of global economic crisis. The selling pressure intensified following the weakness in European peers.

Bombay Stock Exchange's Sensex was at 16086.83, down 382.96 points or 2.33 per cent. The 30-share index touched 52-week low of 15987.77 and high of 16287.72.

National Stock Exchange's Nifty was at 4826.05, down 118.10 points or 2.39 per cent. The broader index touched a high of 4893.60 and 52-week low of 4796.10 in trade so far.

BSE Midcap Index was down 2.08 per cent and BSE Smallcap Index edged 2.64 per cent lower.

Amongst the sectoral indices, BSE IT Index plunged 4.99 per cent, BSE Capital Goods Index fell 4 per cent lower and BSE Bankex declined 2.20 per cent.

Market breadth was negative on the BSE with 2242 losers against 559 gainers.

"Current weak tone is likely to extend and prices could test the supports at 4920 & 4856 in the coming 2-3 sessions.

As the aforesaid oscillators are already hovering in the oversold territory prices are expected to see some buying interest in the said support zone and attempt an upside recovery towards 5200 and even higher.

However inability to hold support at 4856 would extend the fall towards the May low of 4786 delaying the expected recovery," said Aditya Birla Money report

Shares in India's leading software services companies including Infosys slumped to their lowest level in 21 months on Friday as investors retreated from the exporters on heightened fears of a recession in the United States, the top market for the sector.

Sector leader Tata Consultancy Services fell up to 6 per cent, Infosys dropped as much as 7.8 per cent and No. 3 Wipro shed as much as 5.4 per cent in the Mumbai market that was down 2.4 per cent. India's three largest IT companies dragged the country's IT index down as much as 3.8 per cent to its lowest level since November 2009.

HCL Technologies Ltd , the No. 4 software services firm, dropped as much as 7.8 per cent to 365.70 rupees on today after falling more than 6 per cent in the previous session.

Wipro net up by one percent in first quarter

India’s third-largest software services provider Wipro is seeing some signs of positive momentum amid increased outsourcing as clients focus on optimizing operations.

Wipro had announced earlier this year that it would reorganize its technology business into industry-focused units, and would have divisions devoted to banking and financial services, healthcare, and media and telecommunications among others.

The Chairman Azim Premji said, We are seeing early signs of positive momentum after the re-organization. Clients continue to focus on optimizing operations, creating new products and getting access to newer marketets.


Wipro Wednesday beat analysts expectations as consolidated net profit for the first quarter rose 1.3% from a year ago to Rs 1,335 crore. Consolidated Net sales for the three-month period were up 18.3% to Rs 8,564 crore. On a sequential basis, net profit was down 2.9%, while revenue was up 3%.

Analysts on average were expecting Wipro to report net profit of Rs 1,327 crore on revenue of Rs 8,406 crore in April-June.

The executive director and chief financial officer Suresh Senapaty said, We have maintained our operating margins in the current quarter despite one month impact of salary revision,

The company added 49 customers in the first quarter and had over 1.26 lakh employees as of June 30.

Wipro is seeing strong demand and client wins in the developed markets, including one of the largest food manufacturer in the UK and a top ten universal bank. The India and Middle East regions too demonstrated strong wins across multiple segments, the company said.

The company's larger rival Tata Consultancy Services (TCS) also beat analysts expectations last week, signaling strong demand for software services despite the global economic uncertainty.

Meanwhile, Wipro’s revenue from IT products segment rose 21% from a year ago to Rs 1,006 crore, while EBIT was up 26% to Rs 42.3 crore.
Revenue from the company’s consumer care and lightning business was up 18% to Rs 755 crore, while EBIT was up flat at Rs 89.5 crore.