Sensex down 100 points; banks, IT shares drag

Markets have extended losses in the morning deals with IT shares leading the decline after TCS missed the street expectations. Meanwhile, banking shares are losing sheen in today’s trade on the buzz that foreign portfolio investors have pared their holdings in approximately 21 banks in the March quarter on deteriorating asset quality concerns which is likely to impact on earnings.

At 10.30 AM, the Sensex is down 102 points at 28,564 and the Nifty is down 53 points at 8,654 levels

RUPEE

The rupee lost seven paise at 62.37 against the US dollar in early trade today at the Interbank Foreign Exchange due to fresh demand for the American currency from importers.

KEY STOCKS

On the sectoral front, BSE IT, Healthcare, Teck and Bankex are down up to 2% . However, BSE Oil & Gas and Metal indices are trading higher up to 0.7%.

TCS has lost over 4% after the company’s fourth-quarter revenues fell 1.1 percent to Rs 24,220 crore with EBIT falling 0.5 percent to Rs 6,591 crore while net profit (adjusted for one-time employee bonus) rose 8.4 percent to Rs 5,906 crore. Tracking the weakness, Wipro lost 2%.

Bajaj Auto has shed over 1.5% after CLSA downgraded the stock.

Shares of Hindalco Industries gained over 1% after India's largest investor Life Insurance Corp (LIC) has increased stake in the company.

Banking stocks are witnessing selling pressure in the morning trades. SBI, HDFC Bank, ICICI Bank and ICICI Bank are down up to 1.5% after foreign portfolio investors 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.

M&M, India's largest maker of sport-utility vehicles, is in the final stages of negotiations to buy Italian auto-design firm Pininfarina SpA, according to people familiar with the matter. The stock is trading flat with a negative bias.

Reliance is trading over 1.4% as 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. RIL will announce its January-March 2015 results later during the day.

Erik Buell Racing (EBR), Hero MotoCorp's US-based technology partner, went into "receivership" after it filed for protection from creditors under the state of Wisconsin's bankruptcy rules. Hero Motocorp is down 1%.

Sun Pharma has inked a pact with Israel's Technion university to develop anti-cancer drugs. The subsidiaries of the Mumbai-based drug firm and Technion-Israel Institute of Technology have entered into an exclusive worldwide research and license agreement, Sun Pharma is trading flat.

State-run power equipment maker BHEL  has fully commissioned 2,400 MW OP Jindal thermal power project in Chhattisgarh. The stock is up nearly 1%.

ONGC grappling with aging fields, is prepared to sacrifice profits by retaining a plan to pump Rs.11 trillion into a search for reserves even as crude slumps, according to media reports. The stock is up 0.5%.

GAIL is staring at yet another gloomy year as soft energy prices and poor demand for petrochemicals squeeze India’s biggest gas transmission and marketing company. The stock is down 1%.

The broader markets are in line with the large counterparts. BSE Midcap and Smallcap indices are trading lower up to 0.7%.

Market breadth is weak on the BSE with 1,114 declines versus 908 advances.