Mkts end in red; experts see consolidation

The weak Asian indices and the sharp overnight fall on Wall Street caused the Indian markets to open with a deep cut despite the good Q1 Infosys numbers. The tech sector was the worst hit after Infosys downgraded its Q2 and FY08 guidance.

The markets ended in red and on the back of weak guidance. The entire IT pack was beaten down and among the top losers.

However, selective buying was seen in metal, realty, cement and construction space. Even the midcap and smallcap space was buzzing and outperformed the benchmark indices.

Nifty closed at 4,387, down 19 points, while the Sensex shut shop at 14,910, down 99 points.

Post-Infosys results, the IT stocks took it on the chin and the index is down 2.9%. In its results, Infosys has said that there will be pressure on the margins due to appreciation in the rupee. The rupee is trading at 40.38 today.

Indiabulls Real, Parsvnath, Akruti Nirman, Mahindra Gesco are the gainers in the realty space.

The BSE Midcap Index ended at 6,704.40 up 39 points, or 0.60%, while the BSE Smallcap Index ended at 8,074.86 down 65 points, or 0.8%. The BSE Capital Goods Index closed flat at 12,755.97 and the BSE Health Care Index was down 0.3%, at 3,838.54. The BSE Realty Index was up 3%.

Shanti Ekambaram, Director, Kotak Mahindra Capital believes that the markets are reasonably valued and despite volatility it is still looking good in the medium and long-term.

 

"Liquidity has been really driving the markets in the last two to three weeks. Otherwise, markets are reasonably valued. We have seen a huge supply in the primary market. It has gotten absorbed and the Sensex has gone beyond its magical figure of 15,000. So, the story continues to be strong and while markets may be volatile, in the medium and long-term, it still looks good," said Ekambaram.

 

Deepak Chabbria, CEO at IL&FS Investsmart Asia Pacific said that the Infosys results were in line with expectations. He does not feel the results will hurt the market.

 

"We are just at the start of the result season. While nobody had big expectations from IT, the fact that they are one of the first results to come out, has impacted the market in the near-term, given what is happening in the global equity markets today. We will probably consolidate, with individual stories moving up, on good news coming from corporate performance," said Chabbria.