Nifty at 20-month high; IT stocks hit on Cognizant outlook

Indian markets traded off the day's high after sailing to a 20-month high on Wednesday. The Nifty traded below the key 5,900 mark after taking the key level for the first time since April 2011.

Sentiment was impacted the HSBC PMI indicated that the services sector grew at its weakest pace in over a year during November. Services make up nearly 60 percent of economic output and any sign of deceleration darkens the outlook for India's economy, as the sector has been the lone bright spot for most of this year.

At noon, the Sensex traded 37 points or 0.2 per cent higher while the Nifty gained 7 points to 5,896.

Earlier, markets hit a 20-month high ahead of the crucial vote on foreign direct investment in multi-brand retail in parliament due later in the day.

Independent analyst Sarvendra Srivastava said some volatility around 5,900 levels can be expected because it is an event day in an allusion to the FDI vote in Parliament.

"5,850 is an immediate support while 5,950 is the key upside pivot point for now," he added.

Indian equities have seen sharp gains in December mainly on account of strong liquidity and most analysts have turned positive in their outlook despite weak macro-economic data.

Retail stocks traded with strong gains. Pantaloon Retail traded 0.6 per cent higher at Rs 231.50 while Tata group promoted Trent gained 1.3 per cent to Rs 1,234.55. Smaller stocks like Koutons traded with over 4 per cent gains.

IT stocks fell over 1 per cent after U.S. listed Cognizant said it expected sales to growth at 16 per cent in 2013, lower than 20 per cent expected growth in 2012. Wipro was among the biggest Nifty loses, down 2.3 per cent. Infosys declined 2 per cent.

On the Nifty, 30 of the 50 stocks traded higher. Mining major Sesa Goa and aluminium maker Hindalco were the top Nifty gainers.

Asian shares rose on Wednesday, led by gains in Chinese equities. However, concerns over whether U.S. lawmakers can resolve a budget impasse before year-end to avert a possible economic slump weighed on sentiment.

Market mood remains positive ahead of the outcome of the crucial vote on foreign direct investment in multi-brand retail in parliament due later in the day.


(With inputs from Reuters)