Technology stocks lead market crash

Lower than expected revenue guidance from Infosys is all it took to send the indices crashing to their largest single day fall since May of last year. To make matters worse, the guidance from Infosys yesterday came on a holiday for the local markets. The markets opened today on the back of a large sell off in Infosys in the US, the stock losing close to ten per cent in two days.

As expected, the indices opened deep in the red and steadily lost further ground except for a brief period before noon, when they tried to stabilise. Overall weakness in other Asian markets added to the gloom as technology stocks were hammered down. Sensex closed at 6248, down a staggering 220 points and the Nifty at 1956, down 69 points. Nifty April futures closed at a massive 19 points or a percentage lower than the spot index.

Among index stocks, ABB, Hero Honda and Colgate were the only gainers while Infosys, Wirpo and SAIL were the major losers. The market lost over Rs24,000 crore of value in a single day.

US markets continued the weak trend from Wednesday and slumped over a per cent. Lower retail sales, resulting from higher fuel prices and interest rates, have led to worries about weakening corporate performance in the near future. Worse than expected results and a weak outlook from IBM spooked the technology heavy NASDAQ index. Dow lost a per cent while NASDAQ lost more than a per cent.

Crude futures for May delivery opened weak yesterday, going below the psychological mark of $50 to a barrel. However, traders returned later in the day and covered their short positions which pushed the quotes to above $51. Today, crude has opened weak in early European trades.

Many of the Indian ADR's came crashing down as software stocks led by Infosys saw large selling by investors. Infosys ADR lost close to seven per cent and has lost almost 20 per cent from its recent highs. Satyam lost over five per cent while Wipro lost over four per cent. ICICI Bank, MTNL, Dr Reddy's and VSNL were all losers. HDFC Bank was the only one to close with marginal gains.