Sensex dives 106 points as IT tanks after Infosys cuts guidance
Technology stocks took a hammering in the wake of muted guidance from Infosys, which pulled down the benchmark Sensex 106 points below the 28,000 mark at the close, while a 'terror attack' in France kept the market on the edge.
Mumbai: Technology stocks took a hammering in the wake of muted guidance from Infosys, which pulled down the benchmark Sensex 106 points below the 28,000-mark at the close, while a 'terror attack' in France kept the market on the edge.
The IT index bore the brunt after Infosys slashed its full-year revenue guidance, which triggered a massive sell-off in the technology sector pack, where the fall was across the board.
Risk sentiment soured further after a gunman ploughed a truck into a crowd in France, killing at least 80 people, which roiled European shares.
China offered a glimmer of hope as second quarter GDP grew at 6.7 percent, which somewhat cushioned the impact of the twin blow. Another record closing in US markets offered relief too, dealers said.
These developments apart, improving global liquidity, good monsoon and likely passage of the GST Bill in the Upper House of Parliament are seen as key factors in determining the way the market will move forward, which are expected to limit the extent of the downside.
For the week, the Sensex rallied 709.60 points, or 2.61 percent, while the NSE Nifty surged 218.20 points, or 2.62 percent.
Infosys plunged 8.81 percent to Rs 1,072.25 after it cut full-year revenue guidance to 10.5-12 percent in constant currency terms despite a 13.4 percent growth in consolidated net profit at Rs 3,436 crore for the June quarter.
TCS too came under pressure as it fell despite better-than-expected Q1 earnings and ended 3.11 percent down while Wipro lost 2.81 percent.
As a result, the BSE IT index plunged 5.35 percent while the technology index took a hit of nearly 3.94 percent.
The 30-share Sensex crossed the key 28,000-level on sustained foreign capital inflows and higher Asian markets, tracking another record closing in the US, but could not hold on to it for long.
It slipped into the red soon after Infosys results and settled lower 105.61 points, or 0.38 percent, at 27,836.50.
The 50-issue Nifty too ended at 8,541.40, a loss of 23.60 points, or 0.28 percent.
"A colorless start to the earnings season and Bank of England's status quo on interest rates provides investors to stay cautious," said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.
Coal India, NTPC, GAIL, ICICI Bank, Hero MotoCorp, Dr Reddy's, ONGC, ITC and Power Grid all ran up losses.
RIL ended 0.61 percent higher as participants raised their bets ahead of quarterly earnings later in the day.
Broader markets were mixed, with the BSE small-cap falling 0.74 percent and mid-cap advancing 0.09 percent.
The buying momentum continued for foreign portfolio investors as they net bought shares worth Rs 869.84 crore yesterday, showed provisional data of the stock exchanges.
Other stock markets in Asia ended higher, with Japan's Nikkei rising 0.68 per cent and Hong Kong's Hang Seng 0.46 per cent. China's Shanghai Composite rose 0.01 percent.
Europe lay low, with London FTSE falling 0.14 percent, Paris CAC 0.48 percent and Frankfurt's DAX 0.35 percent.