INVESTORS TRIM THEIR POSITIONS

After the late position squaring that led the Indian frontline indices to take a sharp plunge on Friday, the pessimism got spilled over into Monday's session as investors continued to trim down positions amid daunting global developments, while there were no significant triggers on the domestic front too to lift the sentiments. Markets across the globe got pounded on the back of disappointing US payrolls data, higher than expected inflation data from China and continued fears over the spread of euro-zone debt crisis, which together dimmed the global economic recovery outlook. All Asian peers except the Chinese benchmark settled on a somber note while the European counterparts too traded with large cuts of over a percent, undermining mood of local investors. On the domestic front, the metal counter once again reeled under tremendous selling pressure as investors took profits off the table after reports that the Federation of Indian Mineral Industries (FIMI) is susceptible that Iron ore exports may fall by over 20% in the current fiscal due to hike in duty on overseas shipments. As per the associations' estimates, export of iron is likely to come down to around 75 million tonnes (MT) in the current fiscal from around 95 MT exports 2010-11. Reports that India's domestic passenger car sales grew by 1.62% for June, the slowest pace of growth in more than two years, too did not go down well with investors. The second-fastest growing auto market is experiencing moderation in growth due to the increased interest rates by RBI, rising fuel prices and surge in cost of raw materials. The Information Technology bellwether Infosys got butchered ahead of its first quarterly earnings announcement scheduled on July 12 while other IT stocks too came under the selling pressure, dragging the IT index. The only positive for the markets was that foreign investors who have put more hot money into Indian equities in the last week than they did in the first half of this year, continued to be on buying spree. FIIs were net buyers of Rs 676.30 crore worth of shares on Monday, taking their total investment value to over Rs 6430.3 cr from last Monday.
Earlier on the Street, the benchmark got off to a negative opening, and failed to claw back into the green terrain through the session. Hefty bouts of profit booking in late trade ensured that the benchmarks snap the session around the day's lowest levels. The NSE's 50-share broadly followed index Nifty, shaved off around three fourth of a percent and settled above the crucial 5,600 support level while Bombay Stock Exchange's Sensitive Index, Sensex took a over hundred point blow and closed above the psychological 18,700 mark. The broader markets which showed some resilience in early trades capitulated by the end of session. The midcap index eased 0.31% while the smallcap index shed 0.42%. On the sectoral front, the high beta Real Estate pocket which saw hefty buying interests in last few sessions, languished at the bottom of the table with 2.54% losses as majors like DLF, HDIL and Unitech plummeted by 3.25%, 2.11% and 5.88% respectively. The IT pocket too took a severe cut of 1.73% led by Infosys, Tata Consultancy Services and Wipro. On the other hand only defensive, FMCG, Consumer Durables and Oil and Gas counters managed to shut shops in the green terrain with moderate gains. On the result corner, most of the stocks that announced their earnings got punished. Shanthi Gears, Sintex Industries and Kavveri Telecom shaved off 0.33%, 2.88% and 0.98% respectively. The markets plunged on weaker volumes of over Rs 0.82 lakh crore while the turnover for NSE F&O segment also remained on the lower side compared to Friday at over 0.93 lakh crore. The market breadth remained negative as there were 1291 shares on the gaining side against 1568 shares on the losing side while 114 shares remained unchanged.
Finally, the BSE Sensex slipped by 136.65 points or 0.72% to settle at 18,721.39, while the S&P CNX Nifty lost 44.55 points or 0.79% to settle at 5,616.10.
The BSE Sensex touched a high and a low of 18,843.97 and 18,679.49, respectively. The BSE Mid cap and Small cap indices were down by 0.31% and 0.42% respectively.
The top gainers on the Sensex were ONGC up 1.59%, Mahindra & Mahindra up 1.13%, ITC up 1.12%, Reliance Communication up 0.72% and Sterlite Inds up 0.28%.
On the flip side, Hindalco down 4.41%, DLF down 3.25%, Wipro down 2.28%, Infosys down 1.98% and Jaiprakash Associate down 1.95% were the top losers on the index.
The top gainers on the BSE sectoral space were FMCG up 0.52%, Consumer Durables (CD) up 0.50%, Oil & Gas up 0.13%, While Realty down 2.54%, IT down 1.73%, TECk down 1.58, Metal down 1.54 and Bankex down by 1.39% were top losers on the BSE sectoral space.
Meanwhile, Indian Information Technology (IT) services market is expected to register a growth of 18% to $9.5 billion in 2011 from $7.6 billion in 2010, according the research firm Gartner. India's domestic IT services market ranks third in Asia-Pacific. The market is forecast to grow to $15 billion by the end of 2014.
'India's domestic IT services is a large emerging market in high growth mode. Coupled with other factors such as openness to adopt technology, and a maturing sourcing approach, it represents an attractive target potential for providers of all sizes. The top 10 providers have a cumulative market share of just 42%, indicating a highly fragmented market served by many small players with no large, dominant, well-entrenched player. However, this scenario varies widely by submarket such as by industry vertical' Arup Roy said.
Currently, only four industry verticals make up the bulk of the market (85% of all IT services spending). Those four industries are banking, financial services and insurance; telecommunications; manufacturing; and government. This means that other industry verticals offer a good opportunity of growth as they start opening up and start engaging with external service providers (ESPs), said the Gartner report.
The Indian IT service providers both national and multinational corporations (MNCs) have almost equal market share, six of the top ten IT service providers are Indian companies and account for almost 22.3% of market and four MNCs account for 19.7% of market share, and rest of the 60% of market is with small and medium size companies, which shows that the IT sectors still has place for new players and hence Indian market presents huge opportunity to grow and to consolidate its position and grab big market share.  From last few years, cost of labour and infrastructure in metro cites are increasing, however, still lowest in the world and cost of inputs like infrastructure and labour differ, and service provider can offer extremely competitive rates.  
Compared to other developed markets, Indian IT sector is quite small; however it also provides opportunity to service providers due to favorable market conditions. The market has a critical mass that is worth tapping and has the potential to expand further with 'as a service'-type service offerings.
'With a historic focus on cost, rather than on value for money, of services, as well as a propensity for scope creep in Indian services deals, new market entrants must be careful about the opportunities they target. These providers should consider providing as-a-service/pay-as-you-go offerings to counter some of these market challenges,' Arup Roy added.
The S&P CNX Nifty touched high and low of 5,652.90 and 5,601.70, respectively.
The top gainers of the Nifty were ONGC up 1.57%, M&M up 1.31%, ITC up 1.17%, Grasim up 1.07% and Sesa Goa up 0.73%.
On the flip side, Hindalco down 4.17%, DLF down 3.52%, Axis Bank down 3.24%, Wipro down 3.12% and SAIL down by 3.11% were the top losers on the index.
The European markets were trading in a negative territory. France's CAC 40 plunged 1.52%, Britain's FTSE 100 lost by 0.23% and Germany's DAX down by 0.92%.

All the Asian equity indices barring Chinese Shanghai composite finished the day's trade in the negative terrain on Monday on the back of unsupportive global cues. The Wall Street declined on Friday on reports that nonfarm payroll rose much lower than expected, also worries escalated about the impact of the euro-zone debt problems on the global economy dampened the sentiments while, surging inflation in China too supported the downfall. Taiwan stocks ended with a cut of about a percent, pressured by a 2.1 percent fall in chip makers, over concerns about the outlook for tech firms. Moreover, Japanese Nikkei sustained its biggest loss in two weeks on Monday, after weak US and Chinese economic data triggered profit-taking on three weeks of gains.