Sensex surrenders early gains as IT stocks crack

Mumbai: Equity benchmark Sensex declined nearly 390 points on Friday, pressured by heavy selling in IT and energy stocks despite a positive trend in global markets.

Rising crude oil prices and relentless foreign capital outflows further weighed on sentiment, traders said.

The 30-share BSE Sensex opened strong but came under severe selling pressure to close 389.01 points or 0.62 per cent lower at 62,181.67. Similarly, the broader NSE Nifty declined 112.75 points or 0.61 per cent to 18,496.60.

HCL Tech was the top loser in the Sensex pack, skidding 6.72 per cent, followed by Tech Mahindra, Infosys, Wipro, TCS and Reliance Industries.

On the other hand, Nestle India, Titan, Sun Pharma, Dr Reddy's, IndusInd Bank and ITC were among the gainers, advancing up to 2.24 per cent.

"Today's downfall in the domestic market was sparked by IT stocks extending their losses after warning of a potential slowdown in business on global recession fears. This was further aggravated by banks losing their grip as PSBs suffered heavy sell-offs.

"However, global bourses were largely positive, although the Fed is expected to raise interest rates by 50 basis points next week," said Vinod Nair, Head of Research at Geojit Financial Services.

On a weekly basis, the Sensex lost 686.83 points or 1.09 per cent, while the Nifty shed 199.50 points or 1.06 per cent.

"Markets seems to be consolidating for last few sessions as participants are lightning their position ahead of crucial US Fed meeting next week. US PPI data to be released later on Friday as well as US CPI data on 13th December would be keenly watched as they would influence the Fed's interest rate decision.

"Further, FIIs have remained net sellers (Rs 5,500 crore) in December so far (baring one positive day) and added to the overall pressure in the market... We expect weakness in tech stocks to continue on account of weak growth outlook. FMCG stocks are expected to do well on the back of fall in commodity prices and improving demand," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

Sector-wise, BSE IT, metal and teck lost as much as 2.98 per cent on Friday, while healthcare and bankex logged gains.

In the broader markets, the BSE midcap and large-cap gauges slipped up to 1 per cent.

Following a rally in the US market, bourses in Tokyo, Hong Kong, Shanghai and Seoul settled in the green.