Infosys extends initial gains on strong Q2 results

Amid negative cues from global markets, weakness continued on the domestic bourses in morning trade. The barometer index, the S&P BSE Sensex was currently down 248 points or 0.93% at 26,389.28. The market breadth indicating the overall health of the market was weak with more than two losers for every gainer on BSE. IT major Infosys jumped in volatile trade after the company reported good Q2 result and announced a liberal 1:1 bonus issue. Other IT stocks were also in demand.

In overseas markets, Asian stocks dropped after US shares tumbled yesterday, 9 October 2014, amid European slowdown concerns and after Hong Kong's government canceled talks with pro-democracy protesters.

Earlier, key indices had tumbled on a sell-off in global stocks.

In the foreign exchange market, the rupee edged lower against the dollar tracking losses of Asian currencies against the dollar.

Brent crude futures tumbled amid speculation that rising global oil supplies will be more than enough to meet slowing demand.

At 10:15 IST, the S&P BSE Sensex was down 248 points or 0.93% at 26,389.28. The index lost 335.90 points at the day's low of 26,301.38 in early trade, its lowest level since 8 October 2014. The index fell 81.36 points at the day's high of 26,555.92 in early trade.

The CNX Nifty was down 71.65 points or 0.9% at 7,888.90. The index hit a low of 7,854.50 in intraday trade, its lowest level since 8 October 2014. The index hit a high of 7,912.65 in intraday trade.

The market breadth indicating the overall health of the market was weak with more than two losers for every gainer on BSE. 1,405 shares declined and 603 shares gained. A total of 60 shares were unchanged.

The BSE Mid-Cap index was off 92.96 points or 0.97% at 9,483.42, underperforming the Sensex. The BSE Small-Cap index was off 91.50 points or 0.85% at 10,640.19, outperforming the Sensex.

The total turnover on BSE amounted to Rs 705 crore by 10:15 IST compared to Rs 250 crore by 09:25 IST.

Among the 30-share Sensex pack, 26 stocks declined and only four of them gained.

Tata Steel (down 3%), Tata Motors (down 3.09%) and Hindalco Industries (down 2.76%) edged lower from the Sensex pack.

IT major Infosys jumped in volatile trade after the company reported good Q2 result and announced a liberal 1:1 bonus issue. The stock was up 6.32% at Rs 3,875.70. Infosys' consolidated net profit as per International Financial Reporting Standards (IFRS) jumped 7.3% to Rs 3096 crore on 4.5% increase in revenue to Rs 13342 crore in Q2 September 2014 over Q1 June 2014. The result was announced during trading hours today, 10 October 2014.

Infosys has maintained its revenue growth guidance in dollar terms for the year ending 31 March 2015 (FY 2015) even as it raised its revenue growth guidance in rupee terms due to rupee depreciation. Infosys expects 7% to 9% growth in the company's revenue in dollar terms in FY 2015. The company expects 6.7% to 8.7% growth its revenue in rupee terms in FY 2015. At the time of announcing Q1 June 2014 results in July 2014, Infosys had forecast 5.6% to 7.6% growth in revenue in rupee terms for FY 2015.

Infosys and its subsidiaries added 49 clients (gross) in Q2 September 2014.

Other shares from the IT sector were also in demand following good Q2 result from Infosys. Tata Consultancy Services (TCS) (up 0.19%), Wipro (up 0.65%), HCL Technologies (up 1.72%), Oracle Financial Services Software (up 0.09%), Tech Mahindra (up 1.35%) and Hexaware Technologies (up 2.56%) gained.

Meanwhile, provisional data released by the stock exchanges after trading hours yesterday, 9 October 2014, showed that foreign portfolio investors (FPIs) sold shares worth a net Rs 20.89 crore on that day.

In the foreign exchange market, the rupee edged lower against the dollar tracking losses of Asian currencies against the dollar. The partially convertible rupee was hovering at 61.15, compared with its close of 61.0575 during the previous trading session.

Brent crude futures tumbled amid speculation that rising global oil supplies will be more than enough to meet slowing demand. Brent for November settlement was down $1.82 a barrel at $88.23 a barrel. The contract dropped to $88.11 a barrel in intraday trade -- its lowest level since December 2010.

Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.

The government will unveil industrial production data for August 2014 after market hours today, 10 October 2014. India's Index of industrial production (IIP) growth moderated to 0.5% in July 2014, from 3.9% (revised) increase recorded in the previous month of June 2014.

Asian stocks dropped today, 10 October 2014, after US shares tumbled yesterday, 9 October 2014, amid European slowdown concerns and after Hong Kong's government canceled talks with pro-democracy protesters. Key benchmark indices in China, Singapore, Hong Kong, Japan, Indonesia and South Korea were off 0.59% to 1.64%. Taiwan's markets are shut today.

Hong Kong's government today, 10 October 2014, canceled talks with pro-democracy protesters after leaders of the movement called supporters back into the streets. The occupation by demonstrators, who are upset with Beijing demands to vet candidates for the city's leadership, is illegal and must end, Carrie Lam, Hong Kong's No. 2 official, told reporters.

Trading in US index futures indicated that the Dow could fall 46 points at the opening bell on Friday, 10 October 2014. US stocks slumped on Thursday, 9 October 2014, on concern that slowing growth in Europe will hurt the American economy.

Europe's biggest economy, Germany, reported on Thursday, 9 October 2014 that its exports fell 5.8% in August, the worst decline since January 2009.

In Europe, the Bank of England (BoE) voted on Thursday, 9 October 2014 to keep its main interest rate at a record-low level of 0.5%, with Britain experiencing low inflation and steady economic recovery. The central bank's nine-strong monetary policy committee opted also to maintain the level of its cash stimulus, or quantitative easing, at 375 billion ($608 billion, 476 billion), the BoE said in a statement issued following a regular monthly meeting.

European Central Bank President Mario Draghi on Thursday, 9 October 2014, said the central bank must lift inflation from an excessively low level as the recovery falters. Draghi said in a speech in Washington that boosting growth in the euro area will have to come through improvements in productivity.

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