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Tech stocks nosedive on Nasdaq jitters

A. Srikanth

MOST technology stocks fell steeply during the day in reaction to overnight losses at the Nasdaq. The Sensex made a small rebound after it hit its yearly low of 4943.30 to close the day at 5041.08, down by 61.38 points compared to the previous close.

The BL - 250 composite index finished at 1721.08, down by 49.29 points over the previous close. A look at the trading statistics of the day shows that while 584 stocks advanced, 1,032 lost value. As 18 stocks hit new highs, 22 touched new lows.

On Wednesday, the Nasdaq index fell by nearly four per cent to warnings from Mark Mobius of Templeton Funds and Abby Cohen of Goldman Sachs about the exuberance that the Internet stocks in the US market created.

The share price of Infosys Technologies fell by $21 at the Nasdaq to close at $250. As a reaction to this most leading Indian infotech stocks took a beating during the day. The share price fell by Rs. 667.10 to close at Rs. 9,676 though the number of sha res traded for the day also fell from 1.03 lakh shares to 91,481 shares.

The share price of Wipro fell by Rs. 519.15 to close at Rs. 5,970.80 as 1.03 lakh shares changed hands during the day.

The share price of Rolta India too took a beating during the day declining by Rs. 54.25 to close at Rs. 623.95.

The share price of Silverline fell by Rs. 74.95 to end the day at Rs. 862.05. However, the trading volumes were lower compared to the previous day, indicating that the selling pressure was not really strong.

According to dealers, the lack of volumes could only suggest that the fall was a temporary correction. With the announcement of the annual results, market players expect the leading infotech stocks to rise in value.

A Reuters poll has also indicated that most leading software stocks are expected to post above average results for fiscal 1999-2000.

As the infotech sector posted negative returns, major cyclical stocks rallied to post significant gains. The major gainers include Reliance Industries, Hindalco and SBI.

The share price of Reliance Industries shot up by Rs. 21.55 to end the day at Rs. 291.25 accompanied by an increase in trading volumes from 72.92 lakh shares to 98.24 lakh shares.

The share price of Hindalco went up by Rs. 23.25 to close at Rs. 738.25 even though trading volumes declined marginally from 27,258 shares to 23,794 shares.

The SBI stock rallied to end the day at Rs. 200, up by Rs. 4.50 over the previous close. A poll conducted by Reuters has said that the bank's net profit for 1999-2000 is expected to go up by 66 per cent to Rs. 1,709 crores.

Other major gainers for the day include McDowell, Padmini Polymers, Gramophone Company, Dr. Reddy's Labs and Asian Paints.

The share price of McDowell went up by Rs. 8.95 to close at Rs. 146 as the number of shares that were traded for the day shot up from 15,390 shares to 2.09 lakh shares.

On the back of a significant increase in trading volumes from 6,470 shares to 13,490 shares, the share price of Gramophone Company went up by Rs. 48.45 to close at Rs. 1,307.25.

The share price of Dr. Reddy's Labs rose by Rs. 53.30 to close at Rs. 1,492.25 as the trading volumes appreciated from 84,314 shares to 1.29 lakh shares.

Other major losers within the infotech sector include Satyam Computer, SSI and NIIT. The share price of SSI fell by Rs. 358.05 to close at Rs. 4,820 even though trading volumes were low compared to the previous day.

The company has said that it had entered into a joint venture with the Hong Kong-based Technology Venture Holdings Ltd for a foray into the Hong Kong and Chinese technology education markets.

Even as India's largest private sector Internet firm, Satyam Infoway Ltd, tied up with the Indian affiliate of the US-based travel services firm Carlson Wagonlit Inc to enable it to offer online air travel, hotel and car hire booking services on its port al Satyamonline.com, the share price of Satyam Computer, the holding company, fell by Rs. 336.25 to close at Rs. 4,813.75. The trading volumes were, however, weak at 8.18 lakh shares compared to the previous day's figures.