Mumbai: Equity benchmarks ended three days of gains to close modestly in the red on Monday, weighed by bearish global cues and robust selling in IT counters following lacklustre Q1 results from TCS. The rupee dropping to a fresh lifetime low against the US dollar further sapped risk appetite. The 30-share BSE Sensex, which opened on the backfoot, witnessed strong buying in late-afternoon trade.
However, it could not sustain the momentum and closed 86.61 points or 0.16 per cent lower at 54,395.23. dropping 5.03 per cent, followed by TCS which lost 4.64 per cent after its earnings failed to match market expectations. The country's largest software exporter TCS on Friday reported a 5.2 per cent rise in June quarter net profit to Rs 9,478 crore, restricted by the impact of annual wage hikes and promotions that took operating profit margins to multi-quarter lows.
Spooked by the results, other IT stocks too suffered strong losses in Monday's session, with HCL Tech, Infosys, Wipro and Tech Mahindra shedding up to 4.10 per cent. In contrast, Tata Steel, M&M, Dr Reddy's, ICICI Bank, Asian Paints, Axis Bank and Reliance Industries climbed as much as 3.04 per cent. "As the domestic market turned its focus towards quarterly results, the weak start of IT earnings wounded the sentiments, forcing benchmark indices to open on a weak note.
However, with support from banking, metal and energy stocks, the domestic market managed to pare its losses to close flattish," said Vinod Nair, Head of Research at Geojit Financial Services. Ajit Mishra, VP - Research, Religare Broking, said amid the mixed global sentiment, the focus should be on the upcoming macroeconomic data (IIP and CPI) and earnings for cues.