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IT shares drag markets on weak US manufacturing data

This article was posted on Feb 4, 2014 and is filed under Market News

IT exporters are leading the decine after weaker-than-expected US manufacturing data

Benchmark share indices were down nearly 1% in the first hour of trade with IT exporters leading the decine after weaker-than-expected US manufacturing data.

At 10:25AM, the 30-share Sensex was down 175 points at 20,034 after hitting a low of 19,963 and the 50-share Nifty was down 45 points at 5,957 after touching an intra-day low of 5,933.

U.S. manufacturing in January expanded at its slowest pace in eight months as new order growth slumped the most in 33 years, while spending on construction projects barely rose in December. The Institure of Supply Management’s index for January declined sharply to 51.3 compared with 56.5 December.

Asian stocks tracked sharp fall in overnight trades on Wall Street. The Nikkei was nearing a three-month low and was down 3.6% at 14,116. Singapore’s Straits Times was down 0.6% while Hong Kong’s Hang Seng was down 2.4%.

The rupee was trading weak against the US dollar at Rs 62.71 compared with the previous close of 62.58. Emerging markets are under pressure after data showing US manufacturing activity slowed sharply raises risk aversion. The dollar index was up 0.15% against a basket of six major currencies.

All sectoral indices on the BSE were trading in negative terrain. BSE IT index was the top loser among the sectoral indices down 2.5% followed by Realty, Metal, Oil and Gas, Bankex, Capital Goods.

IT shares which had remained range bound in the previous sessions witnessed profit taking after weaker-than-expected manufacturing data in the US. Infosys, TCS and Wipro down 1.6-3% each. All these companies earn most of their revenues from exports to the US.

Source: Business Standard

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