Selling pressure intensifies towards the end

Tue, 23 Sep Closing

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Following the weak global cues, the Indian markets succumbed to selling pressure, closing the day on a pessimistic note. While BSE Sensex closed lower by 431 points, the NSE-Nifty fell by 129 points. While blue chip stocks stood as laggards, mid and small cap indices too bore the brunt. Both the BSE Mid Cap and the BSE Small Cap indices were down by 1.9% and 2.4% respectively. Realty and oil and gas stocks observed witnessed maximum selling pressures.

On the global front, the Asian indices closed the day on a poor note. The European indices too have opened weak. The rupee was trading at Rs 60.95 to the dollar at the time of writing.

Barring HCL Tech and Wipro, all other IT stocks have closed the day on a negative note. NIIT Ltd and HCL Infosys turned out to be the worst performers of the day.

One set of news states that the country's fifth largest software services major Tech Mahindra has bagged a multi-million euro agreement from Finnish firm Ahlstrom. The company has been selected by Ahlstrom to manage its information technology operations. Tech Mahindra has got into a 5-year contract, along with a 2-year extension, with Ahlstrom. According to the deal, about 50 Ahlstrom IT employees globally are planned to move to Tech Mahindra under a business transfer agreement. This is expected to work out on 1st December, 2014. With nets sales worth 1 bn euros in 2013, Ahlstrom is a high performance fire-based materials company. Finland being the important strategic market for Tech Mahindra, this agreement will help the company offer innovative service products for the Finnish customers. Tech Mahindra generates nearly 31% of its revenues from Europe. The management has also mentioned that this deal might also lead to certain margin pressures for the company.

All PSU bank stocks have closed the day on a weak note with Oriental Bank of Commerce and Andhra Bank having faced maximum selling pressures. A leading daily states that the public sector lender Syndicate Bank has terminated its suspended chairman and managing director Sudhir Kumar Jain's term with immediate effect. The public sector bank mentioned this in a notice today to BSE. Mr Jain who is currently in CBI (Central Bureau of Investigation) custody was alleged of receiving Rs 50 lakh bribe. He was also accused of misusing his official position to enhance the credit limits of some companies in violation of procedures. Besides Mr Jain, 11 others including CMD (chairman and managing director) and directors of Bhushan Steel and Prakash Industries have been found guilty by the CBI.