Sensex below 28K-mark as tech stocks take a beating

Infosys plummets 8.81%, TCS down 3.11%; France attack keep markets on the edge

Sensex, Nifty, Infosys, BSE, Bombay Stock Exchange, Technology stocks, GST, NSE Nifty, Economy, Stock exchange, India

Sensex initially crossed the key 28,000-level on sustained foreign capital inflows and higher Asian markets. (Source: PTI)

Technology stocks came under intense selling pressure in the wake of muted guidance from Infosys Technologies, sending the benchmark Sensex plunging by 106 points below the 28,000 mark. The terror attack in France also kept the markets on the edge across the world.

The Sensex initially 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 per cent, at 27,836.50. The 50-issue Nifty too ended at 8,541.40, a loss of 23.60 points, or 0.28 per cent. However, for the week, the Sensex rallied 709.60 points, or 2.61 per cent, while the NSE Nifty surged 218.20 points, or 2.62 per cent.

Infosys plunged 8.81 per cent to Rs 1,072.25 after it cut full-year revenue guidance to 10.5-12 per cent in constant currency terms despite a 13.4 per cent 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 per cent down while Wipro lost 2.81 per cent. The BSE IT index plunged 5.35 per cent while the technology index took a hit of nearly 3.94 per cent.

Analysts said risk sentiment soured further after a gunman ploughed a truck into a crowd in France, killing at least 80 people, which roiled European shares. However, China offered a glimmer of hope as second quarter GDP grew at 6.7 per cent, which somewhat cushioned the impact of the twin blow. However, 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.

Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services, said, “the urge to lock into the week’s stellar gains achieved a feverish pitch, following Infosys’ earnings led 10 per cent plunge. However, state-owned banks kept one end up, whose resilience was possibly owing to reports of the government planning easy capital sourcing norms.” Global cues were positive early in the day, with Chinese Q2 GDP figures beating estimates, but risk appetite withdrew as day progressed, as reports on France terror attack weighed on European stocks, and reversed a recovery in Sterling.

Sanjeev Zarbade, VP Kotak Securities, said the markets gained during the week. “Indian markets participated in the global rally with a 2.6 per cent gains for the Sensex. The outlook for the Indian equities remains positive though there could be near-term pullbacks. Strong monsoons and upcoming GST are some of the positives going for the Indian markets. …”