Infosys, weak European cues drag markets

IT shares leads losses

Key share indices ended over 1.3% down on Friday dragged by Infosys after the IT bellwether reported disappointing fourth quarter earnings and offered lower dollar revenue and EPS guidance for FY13.

The 30-share Sensex provisionally ended down 256 points at 17,076 and the 50-share Nifty ended down 78 points at 5,199.

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Updated at 14:49

 

After a range bound movement earlier in the day benchmark share indices lost further ground are trading near their day lows in late noon trades on selling pressure in technology and shares of private banks.

The Sensex was down 245 points at 17,087 and the Nifty lost 71 points at 5,206. The Sensex has touched an intra-day low of 17,027 and the Nifty a low of 5,186 so far.

Asian markets ended with gains. The Nikkei rose 1.2% and the Hang Seng surged 1.8% while the Shanghai Composite ended marginally higher by 0.3%.

Meanwhile,  European shares were down in early trades after China reported its slowest first quarter growth in three years. The CAC-40 and DAX were down over 1% each while the FTSE-100 was down 0.5%.

Among the sectoral indices on the BSE, the IT index was the top loser down 7.8%. Gainers include Healthcare and Auto indices up 1% each followed by FMCG index which gained 0.5%.

Infosys was the top Sensex loser down over 10% after the IT bellwether disappointed once again with its quarterly and what’s more shocking is its depressing guidance for 2012-13. The IT major’s guidance of 8-10 per cent for FY13 is much lower than Nasscom’s industry growth figure of 11-14 per cent. The company’s earnings before interest and tax (EBIT) margin dropped at 29.9% in the fourth quarter of FY12 as against 31.17% in the previous quarter. Among other shares TCS and Wipro have also shed 4-5% each.

However, defensive shares such as pharma and FMCG were gainers along with rate sensitives such as autos. Rate sensitive stocks gained on hopes that the Reserve Bank of India (RBI) will cut the key rates at its upcoming monetary policy review.

FMCG majors ITC and Hindustan Unilever were both up 1% each while Tata Motors, Hero MotoCorp and Maruti Suzuki were gainers in the auto sector. In the pharma segment, Sun Pharma was up 2% and Cipla gained 0.4%.

Among others, shares of pharmaceutical companies are in limelight today. The healthcare index has outperformed by gaining 6%, since the presentation of Union Budget 2012-13 on March 16, compared to less than 1% rise in the benchmark index Sensex. The government has again increased budgetary allocation for healthcare spending, which would be an overall positive for the sector, according to the analyst.

Among the individual stocks, Fulford (India) has rallied up to 20%, followed by JB Chemicals (up 8%), Abbott India (up 5%), Wyeth, Fortis Healthcare and Glenmark Pharmaceuticals (up 4% each), while Sun Pharmaceuticals, Dr Reddy’s Laboratories and Aurobindo Pharma are up by 2-3% on the BSE.

The overall breadth has turned negative with 1,467 stocks declining and 1,254 stocks advancing on  BSE.