MUMBAI, JAN 5: When the Nasdaq market of the US sneezes, Indian stock markets catch cold. The sharp overnight fall in Nasdaq triggered a crash on Indian bourses and joined other world markets in the bear rally on Wednesday. The benchmark Sensex of the Bombay Stock Exchange, which plummeted by 307 points at one stage, showed a whopping loss of 134 points, ending the two-day old dream run by bulls.The markets witnessed huge volatility and Sensex opened sharply lower at 5265.09 but later fluctuated wildly in a range of 5464.35 and 5184.48 before closing at 5357.00 with a sizeable loss of 134.01 or 2.44 per cent compared to the yesterday's close of 5491.01. ``Overnight Nasdaq losses coupled with regional stock market gloom has led to decline in software shares," said an analyst with Jardine Fleming India Broking. The hike in margins by stock exchanges following a directive from the SEBI further affected the sentiment.Infosys Technologies, which has a weightage of 18.46 per cent in Sensex, fell eight percent and the company's share price was frozen down Rs 1,352.80 at Rs 15,557.40 with large sell orders. While the infotech sector shook, shares in telecommunications, economy and the entertainment sectors held their ground and selectively rose on fund buying.The sentiment was affected by a sharp setback in stocks on New York and London last night leading to a severe beating in shares on South-east Asian markets like Hong Kong, Tokyo and Singapore. While Nasdaq fell by 5.56 per cent, Hong Kong declined by 7.18 per cent, South Korea 6.87 per cent, Singapore 5 per cent and New York Stock Exchange 3.17 per cent.Had it not been for the dramatic turnaround by heavy-weighted cyclicals and others like Hindalco, TISCO, MTNL, Reliance, Mahindra, TELCO and ITC, the magnitude of Sensex crash would have been higher. ``On valuations parameter, some of the frontline software stocks looked stretched, so a slight correction was overdue and is healthy," Devina Mehra, head of research at First Global Securitiessaid.FIIs reportedly shifted their focus to India, where share price levels were relatively lower than other world markets. Though they picked up shares of select scrips like Reliance, M&M, Hindalco and others, their presence resulted in fresh speculative activity and higher volatility. In the A group of the BSE, only 16 scrips showed gains in the specified group with Indian Shaving, Sterlite, Hindalco and MTNL hitting the upper price band. As many as 122 shares registered sharp falls with nine locked in lower circuit filter.Zee Telefilms tumbled by Rs 85.60 to 1189. Satyam Computer dipped by Rs 124.85 to Rs 2440, HFCL by Rs 51.25 to Rs 738.90, Pentafour Software by Rs 124.65 to Rs 1433.60, GACL by Rs 15.50 to Rs 303.50, HLL by Rs 75 to Rs 2190, L&T by Rs 49.90 to Rs 574.10, NIIT by Rs 285.65 to Rs 3285.35, Ranbaxy Lab by Rs 82.25 to Rs 982.75 and SBI by Rs 11 to Rs 248.70.However, several scrips flared up and salvaged the market. The negative Nasdaq influence failed to dent RIL which flared up byRs 13 to Rs 285.50, M&M by Rs 35.20 to Rs 525, MTNL by Rs 17.95 to Rs 243, Hindalco by Rs 71.95 to Rs 971.95, ITC by Rs 17.10 to Rs 730, TELCO by Rs 2.40 to Rs 211.90 and TISCO by Rs 5 to Rs 156.85.Analysts said they expected the infotech sector to resume its upward trend after Wednesday's interruption. "This decline is not really a trend reversal," said a trader, adding that the bullish outlook for the information technology sector should keep the sector in focus. "Small corrections like this can be used as buying opportunities in the technology sector," said an official of Pranav Securities. The latest Reuters poll on the earnings of the 30 companies in the benchmark Sensex forecast the net profits of Infosys Technologies will grow 94.44 per cent in the financial year 1999/2000 (April-March).
