The Telegraph
Since 1st March, 1999
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Infosys slide snaps four-day stock rally

Mumbai, May 19: The much-awaited correction on bourses occurred today, triggered by a plunge in Infosys that snapped the four-day winning streak on Dalal Street.

The Bombay Stock Exchange (BSE) sensex lost 12.7 points as institutional investors shunned blue-chips. “Profit taking by smart investors and consolidation before the last crop of year-end results from companies are among the big reasons for the selloff,” said Arun Kejriwal of Kejriwal Research and Investment Services.

However, the fall was cushioned somewhat by the smart rally in stocks like Hindalco, Grasim, &T, SBI and Telco.

Brokers blamed the Infosys slide on a negative research report from a leading foreign institutional investor (FII). The firm was rumoured to have scaled down rates sharply to retain one of its leading customers. The stock surrendered Rs 204.20 to close at Rs 2788.95.

Many in the market feel Infosys may not command the same premium abroad after the ADS listing, since the floating stock there would more than double. This is seen as one the factors that drove down the stock price.

Starting the day at 3063.14, the sensex scaled its intra-day high at 3082.21, but later turned weak and finished at 3043.89 against Friday’s close of 3056.58, a 12.69-point decline. The broad-based bse-100 index dipped 13.02 points to 1538.72 compared with its previous close of 1551.74. The wobbles at home followed a drift in the Asian markets.

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