Markets skid lower ahead of Coal India IPO

Markets continue to slide on back of profit booking ahead of Rs 15,000 cr Coal India IPO expected to hit the street next week. The Sensex has fallen 161 points to 20,333 and Nifty has declined 53 points to 6123.

Inflation has risen month on month, September Whole Sale Price Index has risen to 8.6% versus 8.5% in August.

IT stocks continue to slide, the index has fallen 2% after the IT bellwether reported 13% rise in net profit and also upped its guidance for next year. Ambareesh Baliga, Vice President, Karvy Stock Broking said, "investors should book profits in IT stocks at current levels."

Analysts expect markets to correct on back of selling pressure in the secondary markets ahead of the mega Coal India Issue which will hit the markets next week. I believe that the Coal India’s Initial Public Offer (IPO) will be a game changer, and the markets will correct post that. Most of the money that is coming in is “hot money". The day this money goes out, the markets will slide, Ambareesh Baliga, Vice President, Karvy Stock Broking said.

Baliga expects Nifty to be around 4,800 – 5,000 levels, which is 20% lower to where it is currently.

Heavy selling is also seen in the banking stocks on back of global sell-off in financials due to growing concerns that foreclosure problems in the United States could seep into broader financial markets. Axis Bank has fallen 2%, SBI and ICICI Bank have dipped over 1%.

IT Bellwether Infosys kickstarted the results season on a positive note, analysts expect 20% earnings growth for FY10-11. "Around 20% growth in corporate earnings in FY10-11 is given, some sectors like auto, banking and commodities (metal and non-ferrous), may grow over 20-25%," Deven Choksey, MD, KR Choksey Shares and Securities said.