Brokerage Report Canes Techs

Technology stocks slipped on Thursday after a local brokerage house in its research report accused Rolta of possible accounting irregularities. However, buying support continued in select defensive sector stocks which helped the market recoup some of the losses.

Meanwhile, FIIs remained net sellers on the market. Reflecting these sentiments, the BSE sensex slipped below the 3,300-mark to settle at 3,290.56, down 41.80 points from its Wednesday's close. On the NSE, S&P CNX Nifty shed 15.10 points to close at 1,056.60.

Sentiment in technology stocks were also dampened following Wall Street's sustained losses after yet another US firm joined the list of companies accused of accounting fraud.

On Wednesday, US stocks sank to their five-year lows on Wednesday, after Federal prosecutors launched an unspecified criminal probe into Qwest Comm International Inc, the latest in a string of high profile investigations into corporate America for accounting fraud.

Rolta India crashed 18.71 per cent to Rs 119.50 amid huge volumes on rumours of possible accounting problems. More than 92.51 lakh shares changed hands on the BSE. Most funds were reported to be sellers on the market. However, the company has denied that it has inflated sales and overstated profit.

This triggered a crippling effect on other technology stocks. Infotech majors such as Satyam Computer (down 2.51 per cent to Rs 242.45), HCL Technologies (down 2.35 per cent to Rs 224.50) and Infosys Technologies (down 0.85 per cent to Rs 3,301.65) also slipped further on sustained selling pressure.

Other frontline stocks such as SSI (down 5.45 per cent to Rs 156), Wipro (down 4.36 per cent to Rs 1,302.05), Polaris Software (down 2.74 per cent to Rs 239.35), NIIT (down 1.87 per cent to Rs 243.70), Digital GlobalSoft (down 1.76 per cent to Rs 673.30), Hughes Software (down 1.69 per cent to Rs 203.65), i-flex Solutions (down 1.96 per cent to Rs 505.10) and Mascot Systems (down 1.20 per cent to Rs 222) remained subdued.

Meanwhile, bluechip stocks such as ITC (up 0.75 per cent to Rs 700.85) and Hindustan Lever (up 0.67 per cent to Rs 194) witnessed buying support and recovered from the red on defensive buying.

Nalco (up 1.01 per cent to Rs 105.30) also ended with modest gains, coming off from the day's high of Rs 111.80, ahead of a meeting of the Cabinet committee on disinvestment to consider strategic sale of the state-run aluminium major. But other state-owned firms such as Bhel (down 2.57 per cent to Rs 176.55), HPCL (down 1.54 per cent to Rs 284.65) and MTNL (down 1.17 per cent to Rs 143.15) lost ground on selling pressure.