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Indian shares to open lower on caution after IT slide

BENGALURU (Reuters) – Indian shares were set to open lower on Tuesday over worries about weak tech spending after lacklustre fourth-quarter earnings from the top two IT firms triggered a fall in equities in the previous session.

India’s NSE stock futures listed on the Singapore exchange were down 0.20% at 17,728.50 as of 8:26 a.m. IST.

Information technology stocks led the correction on Monday when the Sensex fell below the psychological 60,000 mark after logging gains in each of previous nine sessions.

The IT index sank to a six-month low on Monday and is down 5.64% thus far into the year, after losing 26% in the previous year, weighed by the onset of a rate hike cycle.

“Infosys came under severe hammering after its earnings failed to meet estimates,” said Shrikant Chouhan, head of equity research (retail) at Kotak Securities. Infosys fell over 9% on Monday.

Weak earnings have added to the concerns in the sector, which has been dragged down by worries of slowing tech spending, recessionary fears and contagion from the global banking crisis over the last few months.

Analysts expect consolidation in the benchmark Nifty 50 index after the recent rise. “Managing risk holds the key,” said Ajit Mishra, vice president of technical research at Religare Broking, citing an uptick in volatility during the earnings season.

Wall Street equities closed marginally higher overnight after top financial services firms JP Morgan and Wells Fargo posted better-than-anticipated earnings. Asian markets were mixed ahead of China’s GDP growth data in the March quarter. [MKTS/GLOB]

Foreign institutional investors snapped their 10-day buying streak on Monday, selling 5.33 billion rupees ($65 million) worth of equities.

Sustained FII buying had supported the recent rise in domestic equities.

Stocks to Watch:

** Angel One: Co posts 30% jump in consolidated net profit in March quarter, as orders surge.

** Jubilant FoodWorks: Co’s stake in Hashtag Loyalty diluted after Coca-Cola buys 15% stake in Hashtag Loyalty for 1.05 billion rupees.

** Hathway Cable and Datacom: Co reports consolidated loss of 146.2 million rupees in March quarter.

** Earnings today: ICICI Lombard, Schaeffler India, CRISIL, Tata Coffee.

($1 = 81.9610 Indian rupees)

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Dhanya Ann Thoppil)

Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.

Source: The Print

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