Infosys result hopes to check depressed D-Street sentiment

The stock markets are banking on information technology giant Infosys’ quarterly results, slated for this week, to lift the sentiment, battered by fears of interest rate rises in view of rising inflation, say experts.

The Bombay Stock Exchange’s benchmark, the Sensex, lost nearly four per cent last week.

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

"The overall mood of the market is nervous, with a string of negative cues, including rate hike fears in view of rising inflation and the widening current account deficit," SMC Capitals’ head of research, Jagannathan Thunuguntla, said.

The first week of the year was disappointing for the markets. The Sensex fell by 817 points. News of food inflation having jumped to 18.32 per cent for the week ended December 25 due to rocketing prices of vegetables was a major dampener. And, 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. It hit the sentiment of both, foreign institutional investors and retail investors.

Market observers feel Dalal Street will continue its southward journey in the coming week, with FIIs withdrawing money. “Inflation and scams have made the short-term outlook very uncertain. Foreigners have been selling every day. Markets would be fearing anti-inflationary action from the government,” said Motilal Oswal Financial Services’ co-founder and joint MD, Raamdeo Agrawal.

Ashika Stock Brokers’ research head, Paras Bothra, said the lacklustre street may get "some" direction from the third-quarter earnings of Infosys. However, market observers also said Infosys was unlikely to bring any great surprises as the IT sector is under pressure due to the rupee’s appreciation against the dollar and the pound.