Dismal Infosys guidance pulls Sensex in red; closes below 18,700
The Sensex on Friday dropped by nearly 130 points to close at 18,675.18 on lower-than-expected Infosys earnings and a cut in its full-year sales guidance, amid slowing industrial production growth in August.
Mumbai: The Sensex on Friday dropped by nearly 130 points to close at 18,675.18 on lower-than-expected Infosys earnings and a cut in its full-year sales guidance, amid slowing industrial production growth in August.
The BSE benchmark index opened nearly 78 points lower dragged down by Infosys scrip which tanked nearly 8 percent on reports the IT major's July-September quarter revenues and profits failed to beat market expectations.
Infosys posted 24.3 percent jump in consolidated net profit at Rs 2,369 crore while its revenues were up 21.7 percent at Rs 9,858 crore. The scrip pared some losses to close at Rs 2,395.65, down 5.36 percent.
The Sensex, which had climbed 174 points in the previous session, closed lower by 129.57 points, or 0.69 percent to 18,675.18. Infosys, Wipro and Bharti Airtel were major losers.
Brokers said market sentiment was hit due to a cut in Infosys' profit margin and sales outlook.
Infosys lowered its revenue growth guidance for the current financial year to 17.3 percent from the earlier target of 19.7 percent, setting off alarm bells.
"It was a down day for markets...For fourth quarter in a row, Infosys' stock crashed post results. Infosys guided about challenging times and trimmed down its FY13 guidance," said Nagji K Rita, CMD, Inventure Growth & Securities.
Dealers said industrial production growth slowing to 2.7 percent in August compared to 3.4 percent in the same month last year, also upset market participants.
"We do not believe this IIP data will have a bearing on the policy stance, although inflation data (on Monday) will still be crucial," said Kapil Gupta, analyst, Edelweiss.
The Sensex staged a partial recovery from the day's low levels on the back of over 1 percent gain in HDFC Bank shares as the lender posted 30 percent rise in quarterly profit.
In 30-share Sensex, 16 stocks declined while 14 scrips including GAIL, Tata Power and Hindalco ended higher.
The 50-share National Stock Exchange index Nifty fell by 32 points, or 0.56 percent to 5,676.05, after touching the day's low of 5,659.35.