Benchmarks turn rangebound; IT stocks decline
Published on May 06, 2022 11:27
The key equity barometers traded in narrow range near the day`s low in mid-morning trade, mirroring negative global cues. The Nifty managed to hold above 16,350 mark. IT shares witnessed across the board selling.
At 11:25 IST, the barometer index, S&P BSE Sensex was down 1039.63 points or 1.87% to 54,662.60. The Nifty 50 index lost 323.50 points or 1.94% to 16,359.15.
Investor sentiment were dented on concerns that the US Federal Reserve`s 50 basis points rate hike would not be enough to control the multi-year high inflation. Further, raising of the inflation targets for 2022 from 5.75% to 10% by the Bank of England spooked markets globally. The British Central Bank also raised interest rates to their 13-year high, to tackle inflation.
The broader market tumbled. The S&P BSE Mid-Cap index fell 2.56% while the S&P BSE Small-Cap index declined 2.64%.
The market breadth, indicating the overall health of the market, was weak. On the BSE, 475 shares rose while 2682 shares fell. A total of 94 shares were unchanged.
The initial public offering (IPO) of insurance behemoth Life Insurance Corporation (LIC) of India received bids for 17.82 crore shares as against 16.20 crore shares on offer, according to stock exchange data at 11:15 IST on Friday (06 May 2022). The issue was subscribed 1.10 times.
The issue opened on 4 May 2022 and it will close on 9 May 2022. The IPO price band is Rs 902 to Rs 949 per equity share. An investor can bid for a minimum of 15 equity shares and in multiples thereof.
The Nifty IT index fell 3.35% to 30,378.10. The index had advanced 2.07% to end at 31,432.45 yesterday.
Coforge (down 13.70%), MindTree (down 6.05%), L&T Technology Services (down 5.20%), Larsen & Toubro Infotech (down 5.02%), Mphasis (down 4.67%), Infosys (down 2.85%), HCL Tech (down 2.75%), Tech Mahindra (down 2.06%) and TCS (down 2.02%) declined.
Happiest Minds Technologies fell 2.94% to Rs 960.85. The company`s net profit rose 6.52% to Rs 52.11 crore while net sales gained 5.86% to Rs 300.57 crore in Q4 FY22 as compared to Q3 FY22.
Wipro slipped 3.88% to Rs 481.70. The IT major and HFCL have entered into a partnership to engineer a variety of 5G transport products that include cell site router, DU (distributed unit) aggregation router, and CU (centralized unit) aggregation router.
Most Asian stocks traded lower on Friday after an overnight drop on Wall Street sent the Dow Jones Industrial Average to its worst day since 2020. Technology stocks in the region sold off, following the tech-heavy Nasdaq Composite`s nearly 5% drop overnight stateside.
US stocks dropped sharply on Thursday amid a broad sell-off, as investor sentiment cratered in the face of concerns that the Federal Reserve`s interest rate hike the previous day would not be enough to tame surging inflation.
The focus now shifts to the U.S. Labor Department`s closely watched monthly employment report on Friday for clues on labor market strength and its impact on monetary policy.
In Europe, the Bank of England on Thursday raised interest rates to their highest level since the financial crisis and warned the economy is on course to shrink under pressure from double-digit inflation. The increase to 1% from 0.75% was backed by six of the bank`s nine policy makers, with three voting for a 50-basis-point move.
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