Guidance pulls Sensex down 373

The National Stock Exchanges wide-based 50-share Nifty Index also finished 1.86 per cent down at 6,062.65. Dalal Street was the worst performer among the major world indices today. The market opened on a positive note but soon slipped into the red on heavy profit-booking after headline inflation inched up in September and food inflation also jumped sharply,raising fears of further RBI action.

With the Infosys guidance disappointing marketmen,IT was the worst-hit space,with the top three losers in in the Sensex pack belonging to this sector. Infosys plunged by 3.39 per cent. Rivals TCS and Wipro also felt the heat and lost 3.52 per cent and 3.58 per cent,respectively.

While Infosyss higher dollar revenue growth guidance for the year to 25 per cent was positive,almost no change in the rupee guidance was disappointing,which led to the stocks sharp fall.

Our expectations of an increase in the INR guidance for FY11 to Rs.121 led by margins was not met. Infosys seems to have chosen to incorporate just the Q2 beat and the INR-USD movement into the guidance, said an Elara Securities analyst.

According to dealers,investors have resorted to profit taking ahead of a mega Rs 15,000-crore initial public offer of state-run Coal India next week. The Coal India IPO,billed as the countrys largest issue,will soak liquidity from the secondary market. Latest data showing higher inflation in September 2010 also weighed on investor sentiment today, said a dealer.