Infosys Q3 nos to set tone for tumbling D-Street: Experts

With the BSE benchmark Sensex losing nearly 4 per cent last week, stock markets are banking on IT giant Infosys quarterly results, slated for this week, to lift the sentiment which has been battered by fears of interest rate hike in view of rising inflation, say experts.

Analysts feel that the markets, grappling with the dearth of positive news flow, will keenly look at October-December quarter numbers of Infosys Technologies, which will mark the beginning of the result season on January 13.

"The overall mood of the market is nervous with a string of negative cues, including rate hike fears in view of rising inflation and widening current account deficit. But, Infosys numbers will act as a fresh trigger for the tumbling Dalal Street," SMC Capitals Strategist and Head of Research Jagannathan Thunuguntla said.

The first week of the year was disappointing for the stock markets, as the key index Sensex plummeted by over 817 points, or 3.98 per cent, during the period.

Food inflation jumped to 18.32 per cent for the week ended December 25 due to skyrocketing prices of vegetables, was the major dampener for the street.

Besides, the country's current account deficit, which represents the net flow of income out of the country barring capital movements, surged by a whopping 72 per cent in the July-September quarter over the same period last year, also hit the FIIs' and retail investors' sentiment.

Market observers feel that the Dalal Street will continue its south-ward journey in the coming week with FIIs withdrawing the money.

"Inflation and scams have made short-term outlook very uncertain. Foreigners have been selling every day. Markets would be faring for anti-inflationary action from the government," Motilal Oswal Financial Services Co-Founder and Joint MD Raamdeo Agrawal said.

Ashika Stock Brokers research head Paras Bothra said that the lacklustre street may get "some" direction from the third quarter earnings of Infosys Technologies.

However, the market observers also noted that Infosys is unlikely to bring any great surprises for the market as the IT sector is under pressure due to the appreciation of rupee against dollar and pound.