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Infosys ends market's winning run; IT giant sees highest fall in 2 years

Sensex drops 0.85% as IT giant's scrip slips by 10%

Pavan Burugula  |  Mumbai 

Infosys CEO Vishal Sikka submitted his resignation to the board on Friday, August 18, 2017. Photo: Reuters
Infosys CEO Vishal Sikka submitted his resignation to the board on Friday, August 18, 2017. Photo: Reuters

A fall in shares ended a three-day winning streak for Indian The benchmark on the fell 271 points or 0.8 per cent to close at 31,524. The 50 of the National Stock Exchange closed 66.7 points or 0.7 per cent to 9,873.

Shares of closed at Rs 923, down Rs 98 or 9.6 per cent. This is the highest single-day fall for the information technology giant in a little more than two years. It is an index heavyweight and the shares opened under selling pressure after chief executive officer said he'd quit. The stock fell as much as 13 per cent, leading the to fall 420 points. However, the staged a comeback in the last two hours of trading.

Of the 271 points fall in the Sensex, 206 points were on account of

Infosys ends market's winning run; IT giant sees highest fall in 2 years

Interestingly, the broader outperformed the benchmark indices. The mid-cap and small-cap indices closed 0.1 per cent and 0.5 per cent down, respectively. However, the market breadth remained largely negative, with 994 stocks advancing against 1,543 posting a decline on the

Market participants say, whenever high weightage stocks like or ITC move significantly, they are bound to have considerable impact on the index. However, the market's overall direction of the market would depend on other macro factors and global cues.

"Investors would continue to be cautious about in the near term. However, the announced buyback is expected to provide some impetus to the stock. But, from an overall market perspective, much will depend on corporate earnings of the next two quarters," said Rakesh Tarway, head of research, Reliance Securities.

The board of directors of will be taking up the buyback proposal on Saturday. Analysts expect the company to keep the buyback price at a good premium to the market price.

Sun and shares, which fell 3.8 per cent and two per cent, were among the other stocks that fell the most on Friday. On the other hand, shares of Tata Cosultancy Services, a rival of Infosys, went up 1.2 per cent. was the biggest gainer in the index, with upward movement of 2.1 per cent. Foreign portfolio investors sold equities worth Rs 2,182 crore, while domestic institutions made net purchases worth Rs 585 crore, from provisional data.

The overall global sentiment also remained subdued on Friday, with Hong Kong's and Japan's 225 closing a little more than one per cent lower. European opened 0.5 per cent to one per cent lower.

"On a year-to-date basis, India has performed well, led by strong liquidity and reform. But, in recent months, inflows from foreign institutional investors have reduced, which mighty impact the performance in the near future. High valuation and lower than expected financial results leading to downgrade in FY18 earnings is a key risk. Given a lack of domestic triggers, the market is likely to perform as per the direction of the global market," said Vinod Nair, research head, Geojit Financial Services.

The trading volumes in surged significantly due to the development. A total of 90.3 million shares of changed hands across and National Stock Exchange. This is close to 23 times the 3-month average volume in  the stock.
 

Infosys ends market's winning run; IT giant sees highest fall in 2 years

First Published: Sat, August 19 2017. 01:19 IST
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