The News International Team
Global growth concerns and weaker economic data from Germany spooked equity benchmarks on Friday but Infosys’ 7 percent rally on Q2 earnings helped the market cap losses.
Largecap indices erased majority of gains seen in previous session. The 30-share BSE Sensex tumbled 339.90 points or 1.28 percent to 26297.38 and the 50-share NSE Nifty closed below the 7900 level, down 100.60 points or 1.26 percent to 7859.95. The broader markets were not spared either; the BSE Midcap and Smallcap indices declined fell over 1 percent.
Experts believe the market continued to stay in tight range of 7800-8200 on the Nifty till next major trigger that is Union Budget.
Nischal Maheshwari, Head Of Research, Edelweiss Securities expects a volatile ride for the Indian market since it is no more dependent on domestic fundamentals which have been getting better by the day, but now there is cause of concern on the global fundamentals especially with IMF’s warning of global growth.
However, every fall in the domestic market should be used as an opportunity to accumulate stocks where the earnings visibility is very strong, said Maheshwari. Although lower crude prices bodes well for India, it shows the demand world over has reduced, he added.
Global markets saw selling pressure after German exports dropped 5.8 percent in August, the largest decline since the financial crisis and remarks from European Central Bank (ECB) President Mario Draghi. Asian markets fell 0.6-2 percent while European markets were down 1-2 percent (at 16 hours IST).
Brent crude slipped to its lowest level in over 4 years as it dropped below USD 90 a barrel, down 0.8 percent to USD 89.35 a barrel and NYMEX crude hit a 22-month low, falling USD 1.01 to USD 87.76 a barrel on lower global demand, excess oil supply and strong dollar.
Back home, investors were also cautious ahead of August industrial output data that will be announced today evening.
For the week, the Sensex and Nifty fell 1 percent each dented by IT, capital goods, healthcare, metals and FMCG stocks but Bank Nifty bucked the trend, up 1 percent.
Infosys hogged the limelight today by announcing better-than-expected earnings on every parameter under CEO Vishal Sikka, who joined officially on June 12. Net profit grew by 7.3 percent sequentially to Rs 3,096 crore and dollar revenue climbed by 3.1 percent to USD 2,201 million in September quarter as against expectations of 3.4 percent and 2.9 percent growth, respectively.
Sikka maintained full year (FY15) dollar revenue growth guidance at 7-9 percent and laid out his blueprint to take revenue growth to 15 percent range and margins to 25 percent range in 2 years. The company also sprang a positive surprise on shareholders by announcing an interim dividend of Rs 30 per share and a 1:1 bonus issue. The stock hit a record high of Rs 3,908.6 during the day, before closing at Rs 3,888.95, up 6.68 percent.
Infosys pushed IT Index 2.3 percent higher. HCL Technologies was up 2.6 percent but TCS and Wipro lost 0.6-1 percent.
Metals saw major selling pressure with the BSE Metal Index falling 4 percent led by Hindalco Industries, Sesa Sterlite, Tata Steel and Coal India 2.5-5 percent.
Tata Motors topped the selling list, down 5 percent followed by ITC, HDFC, HDFC Bank, ICICI Bank, M&M, L&T, HUL, ONGC, Axis Bank, Bharti Airtel and SBI with 1-4 percent loss.
However, petrochemical major Reliance Industries rebounded in last hour of trade, up 0.6 percent ahead of second quarter earnings on Monday. Sun Pharma, Hero Motocorp, BHEL and Dr Reddy’s Labs also saw buying interest, up 0.3-0.5 percent.
In the broader space, paint and tyre shares bucked the trend due to fall in crude oil prices (a raw material for these companies). Asian Paints and Shalimar Paints gained 1 percent and 8 percent, respectively while Apollo Tyres and JK Tyre climbed 1-2 percent.
After fall in crude oil prices, shares of aviation companies like Jet Airways (up 9.5 percent) and SpiceJet (up 6.7 percent) on hopes of reduction in aviation turbine fuel by oil marketing companies.
Aban Offshore shot up over 9 percent on bagging big orders from state-run oil & explorer ONGC.
Meanwhile, Bombay High Court ruled in favour of Vodafone in the transfer pricing case, saying share issuance is not a taxable event. This set a favourable precedent for over 20 other such cases including the Rs 15000 crore Shell tax battle.
About 996 shares advanced while 1922 shares declined on the BSE.