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IT stocks extend recent slide

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Key benchmark indices further extended intraday slide and hit fresh intraday low in afternoon trade. At 13:20 IST, the barometer index, the S&P Sensex, was down 131.31 points or 0.44% at 29,387.43. The 50 index was down 37.45 points or 0.41% at 9,089.40. Domestic bourses were weighed by fall in index heavyweights Industries (RIL) and Indices dropped for the second day in running on profit booking after the recent surge saw hitting record high on Friday, 17 March 2017.

Key indices slipped into the red in morning trade after witnessing a marginally higher start to the session. Indices extended losses as the day's trade progressed.

The Mid-Cap index was down 0.86%. The Small-Cap index was down 0.52%. The fall in both these indices was higher than the Sensex's decline in percentage terms.

The market breadth, indicating the overall health of the market, was weak. On the BSE, 1,665 shares declined and 873 shares rose. A total of 155 shares were unchanged.

Shares of power generation and power distribution companies edged lower. Torrent Power (down 0.02%), GVK Power & Infrastructure (down 0.01%), NHPC (down 0.01%), NTPC (down 0.22%), Adani Power (down 1.99%), Power Grid Corporation of India (down 0.18%), Infrastructure (down 0.97%) and Power (down 0.83%) declined. Tata Power Company rose 0.17%.

Shares of state run coal mining major Coal India rose 0.41% to Rs 293.15. The stock had hit high of Rs 295 and low of Rs 292.75 in intraday trade.

Most IT stocks dropped as rupee continued to strengthen against the dollar. TCS (down 0.05%), Tech Mahindra (down 0.37%) and MphasiS (down 0.11%) edged lower. Infosys (up 0.52%) and Wipro (up 0.19%) gained.

HCL Technologies declined 0.23% to Rs 861.75. The company announced that its board approved buyback of up to 3.50 crore fully paid-up equity shares of the company at Rs 1,000 per share for an aggregate amount not exceeding Rs 3500 crore. The buyback is proposed to be made from the shareholders of the company on a proportionate basis, through the tender offer route. The announcement was made after market hours yesterday, 20 March 2017.

Separately, HCL Technologies said that it has been chosen as the strategic IT services provider to the Volvo Ocean Race. HCL will be responsible for developing and delivering IT solutions for the 2017-18 edition of the race around the world. The Volvo Ocean Race held every three years witnesses the coming together of the best sailors across the world. The announcement was made after market hours yesterday, 20 March 2017.

The partially convertible rupee was hovering at 65.30 versus Friday's close of 65.36. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.

C & C Constructions hit an upper circuit limit of 5% at Rs 24.15 after the company announced that its joint venture (JV) company, EPI-C & C, has been awarded a project by the Government of India for construction of two lane road on National Highway (NH) from Paletwa to India-Myanmar border in Chin State of Myanmar on EPC mode.

In the JV, C & C Constructions has share of 60% and the total contract value of the project is Rs 1518 crore. The project will be governed as per the terms and conditions set forth in the request for proposal (RFP) documents. The announcement was made after market hours yesterday, 20 March 2017.

Overseas, Asian shares were mixed after the prospects of a less-hawkish Federal Reserve policy trajectory. The main US stock indexes closed marginally lower yesterday, 20 March 2017 for the third straight day of losses, as investors were reluctant to make big bets without major economic or corporate news.

Expectations that the US Federal Reserve will have to step up rate hikes to counter inflationary pressure from President Donald Trump's stimulus are waning after the Fed dropped no hints of an acceleration in credit tightening last week.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 21 2017. 13:07 IST