Results dampen market outlook

Deepak Sahijwala & Sanjay R Bhatia

Markets have witnessed a sell-off after Infosys announced disappointing results and poor guidance for the next year. Allround selling has been witnessed in tech stocks. Earlier, taking a cue from global markets, the Indian bourses witnessed a rally, with a minor rise in volumes being seen. Stock-specific action was witnessed as traders and speculators were seen buying into PSU and banking stocks and selling tech stocks. FIIs continued to remain net buyers, albeit their purchases remained limited. Mutual funds however, continued to remain net sellers.

If the fall on Thursday and Friday is any indication then infotech stocks are likely to lose their dominance on the Indian bourses, especially the second rung tech stocks. The tech story is going to be re-rated. It is likely that it may no longer trade at higher PE multiples.

Technically, the benchmark BSE Sensex has a support at the 2,916 level, if this level is breached it is likely to test the 2,838 level. Intermediate pullback rallies are expected, amidst high bouts of volatility. The Q4 results and future earnings guidance to be announced during this month are likely to set the trend for the markets.

CMC
The CMC stock moved in a range of Rs 75.80, touching an intra-day high of Rs 543.40 on April 8 and an intra-day low of Rs 467.60 on April 10. Even though, it moved above the Rs 530 resistance level, it failed to sustain above this level. It is now important that CMC moves and sustains above the Rs 530 level for it to test the Rs 567 level. On the downside, the Rs 445 level is likely to act as an important support level.

Digital GlobalSoft
Digital moved in a range of Rs 131.75, touching an intra-day high of Rs 623.70 on April 7 and intra-day low of Rs 491.95 on April 10. As we had indicated in our last issue, the weakness persisted on the Digital counter. On the downside, the Rs 459 level is likely to act as an important support level. The Rs 510 level would act as resistance level for Digital.

HCL Technologies
The HCL Tech stock has moved in a range of Rs 38, touching an intra-day high of Rs 177 on April 8th and an intra-day low of Rs 139 on April 10th. On the downside, the Rs 126 level is likely to act as an important support level. The Rs 150 level is likely to act as resistance level.

Infosys Technologies
Infosys has moved in a range of Rs 1,381, touching an intra-day high of Rs 4,400 on April 7 and an intra-day low of Rs 3,019 on April 10. On the downside, the Rs 2,200 level is likely to act as an important support level. On the upside, the Rs 2,840 level is likely to act as a resistance level.

NIIT
NIIT has moved in a range of Rs 20.40, touching an intra-day high of Rs 117.50 on April 7 and an intra-day low of Rs 97.10 on April 10. A minor rally was witnessed on the NIIT counter, which took the stock above the Rs 115 level, but profit booking and selling pressure saw it falling below this level. On the downside, the Rs 104 level is likely to act as an important support level. On the upside, the Rs 106 level is likely to act as a resistance level.

Satyam Computers
Satyam has moved in a range of Rs 49.80, touching an intra-day high of Rs 195.45 on April 7 and an intra-day low of Rs 145.65 on April 10. On the downside, the Rs 130 level is likely to act as a support level. On the upside, the Rs 173 level is likely to act as a resistance level.

Wipro
Wipro moved in a range of Rs 384, touching an intra-day high of Rs 1,307 on April 3 and an intra-day low of Rs 923 on April 10. On the downside, the Rs 800 level is likely to act as an important support level. It is likely to face resistance at the Rs 1,030 level.

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Nasdaq

Nasdaq has moved in an extremely range-bound trend. The outcome of war has been discounted and US markets are likely to focus more on the fundamentals of the economy and future earnings of corporates. It has failed to move above its resistance level of 1,426. Now, it is important that it moves above the 1,426 level for the rally to resume. On the downside, the 1,279 level is likely to act as an important support level. As the war draws to a close, wild fluctuations cannot be ruled out.