Sensex, Nifty Struggle; IT Stocks Lead Decline

After wobbling around the flat line in early trade, the BSE Sensex and Nifty came under some selling pressure in afternoon trade.

Brokers said sustained profit-booking by retail investors amidst weak global cues following signs of deepening Ukraine crisis dampened trading sentiment. Asian shares retreated while investors flocked to safe haven assets such as bonds and gold on Thursday, spooked by a Russian troop build-up on the border with Ukraine and tit-for-tat economic sanctions between the West and Moscow.

At 11:50 a.m., the BSE Sensex, which had lost 242.74 points in the previous session, fell by 92 points to 25,572 while Nifty was down 29 points to 7,643.

Analysts remain cautious on Indian markets in the short term. TS Harihar, chief executive and founder of HRBV Client Solutions Private, said that the weak global cues due to geopolitical reasons are likely to impact Indian markets in the short term. He expects Nifty to slide close to 7450.

Market analyst Sarvendra Srivastava said Nifty could head for a bigger correction if 7,593 level is breached on a closing basis.

IT services providers fell after Cognizant Technology Solutions Corp forecast its slowest full-year sales growth in its 20-year history. Tata Consultancy Services, HCL Tech and Infosys fell between 1.5 per cent and 2.5 per cent.

Shares in defence equipment makers gained after the government increased the FDI investment limit in the defence sector to 49 per cent. Astra Micro Wave Products, Bharat Electronics and BEML rose 1-2 per cent.

Railway wagon and track manufacturers gained after the Cabinet approves a plan to hike foreign investment in Railways. Texmaco Rail and Engineering gained 7.2 per cent, while Texmaco gained 1 per cent. Titagarh Wagons was up 5 per cent.