Sensex in tailspin,plunges 300 pts as Infosys shares drop most in a decade

Infosys,the country’s second largest software exporter,tumbled 21.33 per cent on BSE after reported a 3.3 per cent increase in net profit for the January-March quarter and forecast a revenue growth of 6-10 per cent for this fiscal,lower than IT industry body Nasscom’s estimate.

“The main reason for the decline in benchmark indices was the big fall in share price of Infosys,” said Nagji K Rita,Chairman & MD,Inventure Growth and Securities.

“Infosys fell over 20 per cent,its biggest fall since 2003,after delivering disappointing Q4 numbers and FY14 dollar revenue guidance of 6-10 per cent,which is below Nasscom estimates,” Sanjeev Zarbade,Vice President (Private Client Group Research),Kotak Securities said.

The BSE barometer commenced sharply lower with a downside gap of over 265 points and remained in negative terrain throughout the day.

The 50-issue Nifty of the National Stock Exchange also slumped by 65.45 points,or 1.17 per cent,to 5,528.55.

Hit by growth concerns fanned by weak Infosys guidance,other IT companies too suffered losses. TCS fell by 1.63 per cent and Wipro by 4.72 per cent on BSE,draging the sectoral BSE IT index down sharply by 11.09 per cent.

The decline was in contrast to fall in retail inflation in March and factory output growth of 0.6 per cent in February.

“IIP for the month of February came at 0.6 per cent Y-o-Y as against the street expectation of marginal decline,” Zarbade said.

Trading sentiment further dampened on a weakening trend in overseas markets before a report that may show US retail sales stagnated,brokers said.

Key benchmark indices in China,Hong Kong,Japan,Singapore,South Korea and Taiwan fell by 0.06 per cent to 1.31 per cent. European markets were also trading lower on profit-booking after a four-day winning streak.

However gains in FMCG,banking and refinery stocks like

ITC,HUL,SBI,HDFC Bank,ICICI Bank,RIL and ONGC limited the sensex fall to a major extent,otherwise the downslide would have been much more pronounced.

Retail inflation declined to 10.39 per cent in March from 10.91 per cent in February while factory output,as measured by the Index of Industrial Production,has slipped to 0.6 per cent in February from 4.3 per cent in the same period last year.

“Better-than-expected numbers on IIP and CPI inflation was a mix of sustainable and one-off factors,” said Kotak Mahindra Bank Chief Economist Indranil Pan.

Other major losers from the Sensex pack were Coal India (1.78 per cent),Larsen & Toubro (1.31 per cent),Maruti Suzuki (1.27 per cent),Mahindra & Mahindra (1 per cent) and Tata Motors (0.99 per cent).

However,ITC rose by 2.75 per cent followed by SBI 1.98 per cent and Tata Power 1.17 per cent.

Among the sectorial indices,S&P BSE-IT dropped the most by 11.09 per cent followed by S&P BSE-Teck 8.87 per cent and S&P BSE-CG 0.69 per cent.

However,the S&P BSE-FMCG firmed up by 1.95 per cent,S&P BSE-Power 1.02 per cent and S&P BSE-Bankex 0.96 per cent.

The total market breadth turned negative as 1,261 stocks finished in red while 1,042 stocks closed in green and 141 stocks ruled steady. The total turnover was higher at Rs 1,937.63 crore from Rs 1,696.44 crore yesterday.