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S. Muralidhar

THE lower-than-expected earnings guidance issued by software bell-weather Infosys Technologies led to a domino effect among all the information technology stocks in the bourses on Thursday.

The markets have been waiting with bated breath for the software major's results since late last week, when it was widely believed that the general direction of the market will be determined by the earnings numbers.

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The dramatically lower net earnings forecast by the company led to a freefall of IT stock prices, and though stocks in some of the other sectors such as pharma, healthcare and a few FMCG companies rose, the huge fall in the prices of software stocks, shaved off a massive 105.92 points from the BSE Sensex.

The Sensex opened the day at 3,137.24 points, which incidentally was the highest level for the index during Thursday's session, a fall of only about four points from the previous day's close. Intraday, the Sensex touched a low of 3,021.74 points and eventually recovered in part to close a shade higher at 3,035.33 points. However, this was still a fall of about 3.37 per cent compared to Wednesday's close of 3,141.25 points.

The double-digit fall in IT stocks was led by counters such as Mastek, which fell by over 49 per cent on Thursday. Infosys, in contrast, took a hit of Rs 1,113.45 to close at Rs 3,044.60, a fall of 26.78 per cent. Except for Procter & Gamble, which fell by over 14 per cent, all the other top losers in the A group were software stocks.

The Sensex also took a battering due to the fall in prices of other sector stocks including Reliance Industries, down 1.04 per cent, Zee Telefilms down 6.02 per cent, MTNL, down 3.61 per cent, ACC, BHEL, L&T, HLL, Tata Engineering and Tata Steel.

However, despite the `blood on Dalal Street', there were a few bright spots among the pivotals. In comparison to the software stocks that seemed to have fallen off the cliff, the major gainers during the day in contrast had only small jumps to show. Stocks in the healthcare sector were again in the limelight on Thursday.

Among the major gainers were Ranbaxy Laboratories, up 2.81 per cent, Hero Honda, up 4.72 per cent, Cipla, up 2.35 per cent, ITC, up 2.15 per cent, Nestle, up 1.52 per cent, Hindalco, BSES, Castrol, Colgate, Dr Reddy's Laboratories, Glaxo, State Bank of India, Grasim and ICICI Bank. Sun Pharmaceuticals and Alstom Power were the other stocks that gained over three per cent in the A Group.

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