Mumbai, January 22: THE benchmark index of the Bombay Stock Exchange (BSE) Sensex ended the week higher after two weeks of decline, but shed 0.2% on Friday, weighed down by software majors after investors fretted over the exit of two senior personnel at Wipro.
All eyes were now set on the central bank’s quarterly review on Tuesday, in which it is expected to hike key interest rates by 25 basis points as it battles sticky inflation.
Earlier in the day, India’s No. 3 software player replaced the chiefs of its key outsourcing business after reporting third-quarter profit growth that lagged its main rivals, sending its shares down the most in a year.
“… We believe Wipro could lag peers as the new CEO relooks at strategy and given possible churn in BU (business unit) heads,” Bank of America Merrill Lynch said in a note, cutting its rating on the stock to “neutral” from “buy” . Shares in Wipro fell 4.6%, its biggest single-day fall in a year.
“This is definitely a surprise for Wipro … resignations by such key people could lead to losing out on some orders as the contacts move away with the employees,” said RK Gupta, managing director of Taurus Mutual Fund, which holds Wipro stock.
The 30-share BSE index closed 39.01 points lower at 19,007.53 points, with 18 of its components closing in the red. It gained 0.8% this week. In the broader market, gainers beat losers in a ratio of 1.1 to 1, in relatively low volume of 280 million shares. The market’s near-term outlook depends on the Reserve Bank of India’s actions on Tuesday, said Rakesh Rawal, head of private wealth management at broking firm Anand Rathi. The main index is down 7.3% year-to-date , with foreign funds pulling out around $717 million from Indian equities.
Bearish sentiment towards India and Indonesia has clearly taken hold among clients globally , while there is a marked regional split in the view on China, BNP Paribas said in a note.
“There is a clear consensus that developing markets will outperform emerging markets in 2011, as well as a preference for large caps over small caps,” BNP said in the note.
Optimism on third-quarter results pushed leading lenders SBI and ICICI Bank 2.5% and 1.4% higher, respectively. SBI reports its quarterly earnings over the weekend, while ICICI is due to unveil its quarterly performance on Monday. A Reuters poll showed SBI may say its quarterly net profit jumped 10% from a year ago while ICICI may report a 23% rise in its December quarter net profit.
Energy giant Reliance Industries (RIL) closed 1.7% higher at Rs 986.50 ahead of its quarterly earnings, expected after market hours on Friday . A Reuters poll showed the company may report a 31.1% rise in quarterly profit. The 50-share NSE index Nifty ended down 0.3% at 5696.50. World stocks edged up on Friday, but were set to post their biggest weekly drop in eight weeks on concerns that rising inflation in emerging economies such as India and China could lead to aggressive policy action and hurt global growth.
–Agencies–