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IT stocks lead sensex crash of 173 points

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CIOL Bureau
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BANGALORE: Indian knowledge stocks went into a clean shave of 173 points off

the 30-stock Bombay Stock Exchange (BSE) sensitive index, taking it to 5,129 and

its impact was being felt even on Nasdaq.

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Triggered off initially by year-end profit booking by dealers, the drop

gathered momentum after news broke that the Japanese economy had shrunk 1.4 per

cent during the fourth quarter. A pronounced weakness in technology stocks in

almost all Southeast Asian markets, as the party moved westwards and ignited the

disaster locally as well. With the drop, the aggregate market capitalization of

the BSE has fallen Rs 1,30,000 crore since Budget Day – Rs 11,00,000 crore

($254 billion) to an estimated Rs 9,70,000 crore ($220billion).

Stocks like Wipro, Digital Equipments, Silverline Industries, Reliance

Industries and a few other companies have led the post-Budget ’00 fall. On

Monday, Japan’s Nikkei fell 561 points to 19,189 and Hong Kong’s HangSeng

767 points or 4.3 per cent. In early trade, the Nasdaq fell 206 points or 4 per

cent to 4,842 while the 30-scrip Dow crashed 157 points. Indian markets, along

with major global markets, usually respond to movements on the tech-heavy

Nasdaq. Almost all Internet and tech indices in the USA were being beaten down.

Earlier in the day, Softbank and Sony Corporation from Japan and China’s China

Telecom crashed 4 to 8 per cent overnight on sizeable profit-booking on stricter

margin norms, said dealers.

The sentiment in the local market was also adversely affected following

rumors that two large Mumbai-based operators had taken opposite positions on the

Satyam Computer counter and were slugging it out. The combined turnover on the

Bombay and National stock exchanges totaled Rs 8,364 crore. Major losers

included Infosys Technologies, Wipro, Silverline, Global Tele-systems, Satyam

Computers and Penta Communications.

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