Markets Trading Lower, IT Index Down Over 2%

The Indian markets are trading significantly lower. Although they saw had a gap up opening, trades swiftly turned into the red and the trend has stuck since that time. Currently, the Sensex is trading lower by 138.21 points or 0.71% at 19253.65 and Nifty is down 41.70 points or 0.71% at 5858.45.

The Asian stocks too have been pressured after seeing a robust opening. However, the Japanese markets are higher by 0.8% after a Nikkei opinion poll showed the main opposition on track to reach a majority in the elections scheduled for Dec 16, 2012.

On the domestic front, the market breadth is negative, with 1193 (44.23%) advances and 1379 (51.13%) declines. For the last few days, there has been inherent strength in the markets as midcaps and smallcaps have performed better than the broader indices. Although the broader indices are trading lower by 0.71%, the BSE midcap and smallcap indices are higher by 0.13% and 0.08% respectively.

Only 3 of the 13 sectoral indices are currently trading higher. These are Consumer Durables, Auto and Realty, which have gained 0.54%, 0.08% and 0.03% respectively. The strongest losses are seen in the BSE IT and BSE Teck indices, trading lower by 2.19% and 1.77% respectively.

Technology stocks have seen major depreciation today. This resulted out of Cognizant’s employee performance incentives being indicative of a dismal revenue growth outlook of 13% in 2013. Considering that this news has come in from Cognizant, which has been a consistent outperformer, the street is developing a negative outlook on the entire sector. The stock prices of HCL Tech, Infosys and Wipro are lower by 1.13%, 1.69% and 1.57% respectively.

Earlier yesterday, the government passed the multi-brand retail FDI test in the Lok Sabha by gaining a majority vote in favour of foreign inflows. Thus, retail stocks saw a a sharp spike. Pantaloon Retail, Shoppers Stop and Trent reached intraday highs of 5.95%, 6.11% and 3.94% respectively.

Tara Jewels began trading today and got listed at a price of Rs 242 per share, at a 5% premium to the issue price. However, the stock is currently trading at around Rs 230 per share.