Sensex ends 351 points down as bears party; IT, fin top losers

Bears crowded Dalal Street on Thursday after the bulls looked to regain control yesterday. Indian benchmarks were slaughered by a combination of shorts build-up as well as profit booking after yesterday's short covering rally. Financial, and technology stocks got hit post a disappointing Q3 performance by Infosys. Infrastructure companies' shares along with heavyweight Reliance Industries witnessed selling pressure, dragged the Nifty to close at a four-month low today.

The benchmark Nifty got badly bruised by 111.35 points to settle at 5,751.90. Deven Choksey, KR Choksey Securities is not hopeful that markets will hold strong levels. According to him, the pullback was never going to last because it lacked fresh buying.  ''Unless we find fresh buying taking place in the market, we cannot have the confidence of market going up."

He added that 5,700 is a very significant support level for the Nifty. ''If it breaks that, then that could invite further selling pressure,'' he stressed.

India's second largest IT services exporter Infosys Technologies reported 2.48% growth in Q3FY11 net profit of Rs 1,780 crore and revenues grew by just 2.3% at Rs 7,106 crore as against expectations of Rs 1,814.69 crore & Rs 7,200.07 crore, respectively. Explaining the rationale behind the disappointing numbers, the management said that seasonality led to lower volume growth in the third quarter. The BSE IT Index crashed 3.41%; Infosys tanked 5.1% and Wipro was down 3%. HCL Tech fell 2.5% and TCS lost 1%.

The weaker economic outlook in developed markets coupled with high unemployment and risk of sovereign default could impact industry growth, says S Gopalakrishnan, CEO & MD of Infosys.

Though the third quarter results came in as disappointing, Srishti Anand, IT Analyst, Angel Stock Broking sees strong numbers going ahead from Infosys. Infosys' FY11 earnings per share would be close to Rs 121 and FY12 EPS would be upwards of Rs 145 per share, she said. "Management has spoken about a very aggressive hiring strategy of close to 26,000 campus offers with a huge conversion rate of 70%. As well as 25,000 lateral. So, I am talking about more than 40,000 net additions, on probably the base of 1.6 or something, which translates into strong growth for FY12 close to 25% plus. So, I am really comfortable and the guidance looks pretty promising that way."