Live: Rally may not continue till Diwali, Sensex tanks on profit-booking
The BSE Sensex fell around 200 points while the broader Nifty was down 60 points on Wednesday, led by declines in IT shares.<br /><br />
1:26 pm: The BSE Sensex fell more than 200 points while the broader Nifty was down 60 points on Wednesday, led by declines in IT shares.
At 1:27 am, the Sensex was down 244 points at 20620 while Nifty was down 76 points at 6126.
Shares of Wipro Ltd fell 4.85 percent after its July-September revenue in dollar terms grew 2.7 percent sequentially, lagging other major IT services exporters, dealers said.Other IT stocks also fell on profit-taking: Tata Consultancy Services Ltd was down 1.38 percent, Infosys was down 1 percent, while HCL Technologies fell 1.37 percent.
According to Manishi Raychaudhuri, MD, Asian Equity Strategist, BNP Paribas Securities, the current rally may not last long as the economy does not offer much to cheer about apart from reduced current account and trade deficit.
In an interview with CNBC-TV18, he advises investors not to plunge headlong into the midcaps, despite a relative divergence in valuation between them and large-caps. He also foresees poor earnings from PSU banks and Tier-II infrastructure companies, going forward.
Even Jitendra Sriram, managing director and head of research, HSBC India, believes the second half of the earnings season will be a dampener as the IT companies and private banks have already reported strong numbers.
The recent rally in Indian equity market is all thanks to Fed deferring quantitative easing (QE3) and a global markets rally, sriram told CNBC-TV18. However, this rally is unlikely to continue. "I am still quite cautious on the market. I do not think there is more upside to this market into this year-end at least. I still think that the market needs some time for earnings to catch up before it can form some higher base from hereon," he added.
With inputs from Reuters
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