The Sensex’s 434-point rally on Wednesday was seen disintegrating today, as the markets, which opened on a flat note, with a downward bias, soon shed 200 points because of the Infosys results. At present, the markets are off the day’s low, with the Sensex at 19,385 down 312 points, and the Nifty at 5,824 down 88 points.
IT and outsourcing giant Infosys, the country’s second largest provider of IT and ITeS goods and services, declared a 17.1% jump in its Q4FY11 net profit at Rs 1,818 crore, but the stock plunged, because compared to the year-ago period, net profit saw a sequential rise of barely 2.1%. Industry and Street analysts were disappointed as the IT behemoth fell short of their expectations. Another dampener for the bourses is the March inflation figure of 8.98%, as compared to 8.31% reported in February.
The broader markets also slumped due to the 1.5% decline on the benchmark. On the BSE, the Mid-cap index slipped 0.4% to 7,192, while the Small-cap index shed 0.3% at 8,797.
Only four components on the Sensex were trading in the green, with Hero Honda leading the gains at rs 1,789 up 3%, followed by Bharti Airtel at Rs 372, Hindalco Industries at Rs 212 and heavy engineering major Larsen & Toubro at Rs 1,728 all up 1% each.
On the sectoral front, all the indices were in negative territory. Infosys’s results proved to be a severe dampener for the IT index, which plunged 6% to 6,303. The scrip dropped 8% to Rs 3,028, and contributed 170 points to the total loss on the Sensex. Wipro declined 5% to Rs 451, while HCL Technologies shed 4% at Rs 480. Core Projects slipped 3%, while Oracle Financial and TCS shed more than 1% each.
Sharing his views on the IT sector, Shshank Mehta, Derivatives Analyst, Nirmal Bang, said, “Brokerages such as CLSA have downgraded the Infosys stock, as Infosys could fall further. From the IT pack, only TCS looks good.”
Realty stocks also took a beating today, as the index fell 2% to 2,401. Top losers in this space were DB Realty at Rs 111 and Ackruti City at Rs 232 both down 3%, while DLF slipped 2% to Rs 246.
The Power index was one of the significant losers in the sectoral pack, with the index shedding 1% to 2,770. Significant losers on this index were Siemens at Rs 851 down 4%, GVK Power at Rs 28 and Suzlon Energy at Rs 55 both down 2%.
The market breadth was negative, with 1,137 advances versus 1,559 declines.
Speaking on the current market scenario, Mehta added, “A lot of put writing is observed at 5,800, 5,900 and 6,000 strike price; put writers who had bullish stance are squaring off. 5,900 put open interest has fallen by 15 lakh, Inflation and Infosys results are weighing on the markets.”
Source:http://www.business-standard.com/india/news/it-inflation-exert-pressure-sensex-down-312pts/132201/on
