As details poured in, the mood worsened and all IT stocks, led by Infosys, took a severe beating with Sensex losing over 300 points intra-day. The index finally closed down by 256.59 points at 17,232.55, logging its biggest single-day fall after June 1. Infosys shares cracked over 8 per cent as investors were disappointed with revised FY 2013 dollar revenue growth guidance of 5 percent compared to 8-10 percent given in April.
The country`s second largest software firm reported a consolidated net profit of Rs 2,289 crore and sales of Rs 9,616 crore for the first quarter ended June 30. "Infosys results disappointed on all counts... the key issue now is will a price war start in the sector and hence even other companies could start exhibiting signs of strain," said Bhuvnesh Singh, analyst, Barclays.
The lower-than-expected Infosys numbers had a cascading effect across IT scrips with TCS losing 1.80 per cent and Wipro shedding 4 per cent. BSE IT index at 5.11 per cent was day`s worst performer. As many as 21 stocks in Sensex today lost value with Bharti, M&M, Tata Motors and L&T losing in the 1.75-3 per cent range as weak Asian cues and lower opening in Europe hit mood.
Similarly, the 50-share NSE index Nifty fell 71.05 points, or 1.34 per cent, to 5,235.25, dipping below key 5,300 level. Brokers said investors ignored positive cues from provisional May IIP data as April`s number was revised lower. "While May IIP growth has shown some positive surprise... we suspect that the final growth number may be much weaker," said Dhananjay Sinha, Co Head, Institutional Research of Emkay Global Financial.
According to Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said," The May numbers benefitted from the (low) base effect." Among Asian indices, barring China, other markets ended with losses today due to lack of clarity from the minutes of US Federal Reserve`s June policy meeting on future easing measures from the US central bank. Benchmark indices in Hong Kong, Japan, Taiwan, South Korea and Singapore fell by between 0.58 per cent to 2.24 per cent.
European stocks also were trading lower in afternoon deals with Germany`s DAX down by 1.01 per cent, France`s CAC lower by 0.57 per cent and the UK`s FTSE already down 1.17 per cent. Back home, apart from Infosys, major losers from the Sensex pack included Bharti Airtel (3.04 pc), M&M (2.09 pc), Tata Motors (1.97 pc), L&T (1.75 pc), Jindal Steel (1.74 pc), Tata Steel (1.58 pc), Bajaj Auto (1.45 pc), Sterlite Industries (1.36 pc) and HDFC (1.23 pc).
However, the nine Sensex gainers today were led by ONGC that rose by 1.42 per cent and Hero MotoCorp (up 0.88 pc). "FII flows into Indian stocks have been positive of late but may not sustain for long unless there is encouraging policy action from the government`s side in the next few days. DIIs have been selling Indian equities," said Amar Ambani, Head of Research, IIFL.
Among 13 sectoral indices, 11 closed with losses between 5.11 per cent and 0.08 per cent while the BSE-Realty and BSE-Oil&Gas were the only ones to rise. The BSE-IT fell the sharpest (5.11 pc), followed by the BSE-Teck (4.43 pc), the BSE-CD (1.78 pc), the BSE-CG (1.45 pc), the BSE-Auto (1.15 pc), the BSE-Metal (1.03 pc) and the BSE-Bankex (0.93 pc).
The market breadth remained negative as 1,631 scrips ended with losses while 1,174 finished higher. The total turnover firmed up further to Rs 2,189.00 crore from Rs 2,087.86 crore on Wednesday. Foreign Institutional Investors (FIIs) continued their buying spree and they pumped in Rs 251.00 crore on Wednesday as per the SEBI data.