Shares crash after firm start

Sensex (BSE Sensitive Index) opened sharply up at 5711.88 and later fluctuated in a wide range of 5783.51 and 5439.14, before closing at 5511.42 with a net loss of 78.43 points or 1.40 per cent compared to the previous level of 5589.85. The broad-based BSE-100 index dropped by 44.35 points to 3328.33 from the previous close of 3372.68.

Brokers said Sensex, which moved erratically and stood its ground till mid-session reflecting positive activity in heavy-weight counters like Infosys Technologies, NIIT, Hindustan Lever, ITC, BHEL and MTNL, later crashed from its early highs as the weakness in the broad market caught up with these scrips due to heavy selling by speculators as also profit booking by local funds.

Dealers said uncertainty over the market’s direction and concern over prospects for cyclicals affected sentiment forcing the index to close 1.40 per cent lower. Infotech shares looked strong but fell in later trade as the market gave way after surging 3.47 per cent at one stage. "There was fund selling at higher levels in software and in cyclicals no one is sure about growth prospects in the next one year after the budget," said a chief dealer at a foreign brokerage.

FIIs, who slowed down their purchases, picked up shares of select software scrips like Global Telesystems, Tata Elsxi, NIIT besides MTNL, Grasim and Ranbaxy Lab. A sharp downturn in the Dow Jones Industrial Average that tumbled by 415 points to 9755 last night with a 70-point fall in the Nasdaq Composite Index was seen as a negative factor. Infosys Technologies, which crashed from its high of Rs 13812.90 and HLL from Rs 2594, had a severe impact on the sensex.

In the specified group, 26 scrips including index heavyweights like TISCO, SBI, BSES, HPCL and Tata Power of the total 105 losers, were locked in the lower circuit filter at close. However, Global Tele, IDBI and Sterlite Ind hit the upper price band.

Himachal Futuristic remained the most active scrip with a turnover of Rs 863.16 crore of the total volume of business of Rs 5692.78 crore. HFCL lost by Rs 95 to Rs 2320. Satyam Computer slumped by Rs 570.75 to Rs 6564.25, Silverline by Rs 91.25 to Rs 1197.75, ACC by Rs 10.90 to Rs 143.10, BSES by Rs 26.60 to Rs 306.15, HPCL by Rs 8.95 to Rs 103.25, Hindalco by Rs 6.35 to Rs 612.60, ICICI by Rs 7.35 to Rs 167.50, Infosys Tech by Rs 401.35 to Rs 12,388.40, L&T by Rs 14.45 to Rs 300.30, M&M by Rs 24.30 to Rs 346.50, Novartis by Rs 25.25 to Rs 740, RIL by Rs 12.35 to Rs 234.60, SBI by Rs 16.70 to Rs 192.25, Telco by Rs 6 to Rs 126 and TISCO by Rs 7.90 to Rs 90.90.However, Pentamedia Gr rose by Rs 20 to Rs 1920, BHEL by Rs 6 to Rs 132, Grasim by Rs 20 to Rs 365, HLL by Rs 24.70 to Rs 2498.50, IDBI by Rs 5.10 to Rs 69.55, MTNL by Rs 14.85 to 361.25, Ranbaxy by Rs 26 to Rs 705 and Global Tele by Rs 245.10 to Rs 3309.20. Union budget last Tuesday was widely perceived to have hit cyclical and consumer companies hard.

Tax sops for software sought
NEW DELHI: Electronics and Computer Software Export Promotion Council (ESC) today asked the government to treat software units at par with software technology park (STP) units for tax concessions. "Software units irrespective of their location should be provided relaxation under income tax provisions at par with STP and export processing zones," Vivek Singhal, chairman of ESC said in a statement here.

Stating that more than 40 per cent of India’s software exports valued at Rs 5,051 crore was from outside STP and EPZ units, Singhal said adding that the phasing out of tax benefits on export profits under various Income Tax Act provisions would hurt the small exporters.