Weak earnings pull down stocks

Weak earnings reported by heavyweights like HDFC Bank, Reliance Industries, Tata Consultancy Services and Kotak Mahindra Bank triggered profit booking in the market on Monday. The Sensex fell over 770 points, or 1.82 per cent, from the day’s record high, registering the biggest intraday fall in the last five months.

The Sensex touched a high of 42,273 points before profit booking set in after Kotak Mahindra Bank’s third quarter results missed the Street’s profit and revenue estimates. The index finally closed down 416.46 points, or 0.99 per cent, at 41,528 while the Nifty-50 settled 215.95 points lower at 12,224.55, as selling worsened as the day progressed.

Over the weekend, index heavyweights like, RIL, HDFC Bank and TCS posted their quarterly numbers, which seem to have disappointed the street.

“The market fell mainly due to non-encouraging results from frontline companies and also due to the overbought status of the market," said Shrikant Chouhan, senior vice-president-equity, Kotak Securities.

Among stocks that fell sharply post their third quarter earnings on the BSE included Kotak Mahindra Bank (-4.70 per cent), Reliance Industries (3.08), TCS (-2.16), HDFC Bank(-1.80), HCL Technologies (-1.60) and IndusInd Bank (-1.51 per cent).

Domestic institutional investors led the selling in the market. As per provisional data, DIIs were net sellers of equities worth Rs 1,419.85 crore while the FPIs remained on the sidelines with net buying worth Rs 5.87 crore.