Sensex ends down 242 points; IT shares drag

Markets ended lower with IT majors leading the decline among discouraging results from TCS while profit taking in shares of private lenders and pharma added to the losses.

The 30-share Sensex provisionally ended  down 242 points at 28,425 and the 50-share Nifty ended down 104 points at 8,603.  
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(Updated at 2:40PM)
Markets continued to trade lower in late noon trades with IT majors leading the decline among discouraging results from TCS while profit taking in private lenders also added to the losses.

At 2:40PM, the 30-share Sensex was down 109 points at 28,557 and the 50-share Nifty was down 66 points at 8,641.  

The broader markets were also trading lower with BSE Mid-cap down 1.2% and Small-cap index slipped 0.8%.

Foreign institutional investors were net sellers in equities to the tune of Rs 214 crore, as per provisional stock exchange data.

ECONOMY

Meanwhile, the Economist Intelligence Unit (EIU) said that the Indian economy is expected to grow at an average annual rate of 7.1% through 2019, but reform measures announced by the government are "no more than incremental improvements". EIU, which is the research-arm of the London-based publication, The Economist.

SECTORS & STOCKS

IT, Healthcare and Bankex indices were the top losers on the BSE down 1-2% each while Metal was the top gainer.

IT shares weakened after lower than expected revenue growth during the fourth quarter by TCS. Constant currency revenue growth came in lower than expected 1.6% in the fourth quarter, against some analysts' expectations of about 2%. TCS was the top loser down nearly 4% while Infosys and Wipro were down 0.4-2.4% each.

Private lenders also witnessed profit taking with Axis Bank, ICICI Bank and HDFC Bank down 0.5-2.1% each. Foreign portfolio investors have pared their holdings in at least 21 banks in the March quarter (fourth quarter, or Q4) on concerns of deteriorating asset quality and the impact it would have on earnings of the lenders, according to media reports.

Sun Pharma was down over 3% on the back of improved liquidity after 334.96 milllion shares issued by the drug maker on amalgamation of Ranbaxy Laboratories were permitted for trade from today. Among other pharma shares, Dr Reddy's Labs was down 0.7%.

Metal shares are the big gainers in today’s session led by Tata Steel, up nearly 4% on high production in the financial year 2014-15. The steel major has achieved its highest ever annual sales volume of 8.75 MT in the recently concluded fiscal. Sesa Sterlite has gained 3.7% and Hindalco rose nearly 3% on talk that insurance major Life Insurance Corp (LIC) has increased its stake in the company.

RIL is trading higher by 0.5% ahead of its its January-March 2015 quarter results later during the day. Analysts expect the company to post a record fourth quarter net profit as benefitting from refining margins, which will be partially offset by lower petrochemical margins.  From the oil and gas sector, ONGC is up 0.8% while GAIL is down nearly 2%.

FMCG majors, ITC and HUL have risen 0.3% and 0.8% each.