IT, communication stocks take a beating

MUMBAI, FEB. 21. A severe drubbing in information technology and communication shares pushed the Sensex down by 56.99 points to close at 4302.23 on the Bombay Stock Exchange today following sustained selling in the wake of the continued weakness at Nasdaq.

However, select cyclicals and index-based shares extended their overnight gains and partly cushioned the Sensex fall.

IT and communications stocks retreated further on heavy selling by speculators following an overnight steep drop of over 107 points in the Nasdaq composite index due to downgrading of tech shares by analysts and a string of profit-warnings by some tech companies in the U.S., making a total fall of 234 points in the last two trading sessions.

Dealers said speculators, who had built long positions in IT and communication counters in the past on expectation of buying by foreign institutional investors, started offloading their holdings as their hopes were belied due to sustained selling by FIIs.

A bearish trend in Southeast Asian stock markets at close also partly depressed market sentiment.

The BSE-30 share sensitive index opened lower at 4338.31 and touched a high of 4362.50 but late selling by operators pulled down the Sensex to a low of 4285.19 before closing just above the 4300-support level at 4302.23 against yesterday's close of 4359.22, a loss of 1.31 per cent. The BSE-100 index also dropped by 36.62 points to 2193.26 from 2229.88.

Bear onslaught in tech stocks was so high that Aptech, Global Telesystems and Pentamedia logged new 52-low, while cement and refinery scrips reacted on profit-taking.

Meanwhile, sustained buying by FIIs in fast moving consumer goods (FMCG) giant and heavily weighted, Hindustan Lever helped the index to close above major short-term support level.

Bucking the general trend, badly battered media-giant, Zee Telefilms improved further on strong buying support. The BSE-200 index and the Dollex were quoted down at 474.31 and 169.53 against 481.20 and 172 respectively. The BSE-500 declined by 20.36 points to 1405.52 from 1425.88.

Satyam Computer topped the list of highest traded shares with a turnover of Rs. 539.39 crores followed by Zee Telefilms (Rs. 536.01 crores), Infosys Technologies (Rs. 453.44 crores), Himachal Futuristic (Rs. 441.47 crores) and Reliance Industries (Rs. 294.31 crores).

- PTI

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