Infosys hits record high after strong Q2 results

Intraday recovery gathered steam as key benchmark indices traded off the day's high in afternoon trade. The barometer index, the S&P BSE Sensex, was currently down 177.56 points or 0.67% at 26,459.70. Global stocks were weak amid concern global growth is slowing. The market breadth indicating the overall health of the market was weak. Bank stocks declined. Most capital goods stocks also declined. IT major Infosys surged to record high after the company reported good Q2 result and announced a liberal 1:1 bonus issue.

In overseas markets, European stocks edged lower amid concern the region's central bank will face obstacles in its measures to revive the region's economy. 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 13:15 IST, the S&P BSE Sensex was down 177.56 points or 0.67% at 26,459.70. 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 55.35 points or 0.7% at 7,905.20. 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 7,914.20 in intraday trade.

The market breadth indicating the overall health of the market was weak. On BSE, 1,642 shares declined and 985 shares gained. A total of 114 shares were unchanged.

The BSE Mid-Cap index was off 51.28 points or 0.54% at 9,525.10. The BSE Small-Cap index was off 35.91 points or 0.33% at 10,695.78. Both these indices outperformed the Sensex.

Bank stocks declined. Among private bank stocks, HDFC Bank (down 1.87%), IndusInd Bank (down 0.54%), Kotak Mahindra Bank (down 1.29%), Axis Bank (down 1.81%), Yes Bank (down 1.8%), and ICICI Bank (down 0.93%) declined.

PSU bank stocks also declined. State Bank of India (SBI) (down 1.02%), Canara Bank (down 0.57%), Bank of Baroda (down 1.07%), Union Bank of India (down 0.79%), Syndicate Bank (down 1.05%), Indian Overseas Bank (down 1.88%), Andhra Bank (down 0.01%), Oriental Bank of Commerce (down 2.34%), and Dena Bank (down 1.6%), declined. Bank of India (up 0.33%) and Indian Bank (up 0.6%) gained.

Punjab National Bank (PNB) shed 0.74%. PNB during market hours said it has decided to realign the interest rates in case of single domestic term deposit of Rs 1 crore to Rs 10 crore with effect from today, 10 October 2014. PNB said that interest rate has been hiked to 6% from 4% earlier for maturity period of 7 days to 14 days. For maturity period of 15 days to 29 days, interest rate was been hiked to 6% from 4.5% earlier. For maturity period of 30 days to 45 days, interest rate has been cut to 6.25% from 6.5% earlier. For maturity period of 46 days to 90 days, the rate has been cut to 7% from 7.25% earlier. For maturity period of 271 days to less than 1 year, the rate has been cut to 8.5% from 8.75% earlier.

Most capital goods stocks declined. L&T (down 1.61%), ABB India (down 0.51%), Bharat Electronics (down 0.81%), BEML (down 0.79%), Crompton Greaves (down 1.62%), and Siemens (down 2.08%) declined. Bharat Heavy Electricals (Bhel) rose 2.22%.

IT major Infosys jumped after the company reported good Q2 result and announced a liberal 1:1 bonus issue. The stock was up 6.87% at Rs 3,896.10. The stock hit record high of Rs 3,908.60 in intraday trade. 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 now 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.

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 61.13, 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 $1.13 a barrel at $88.92 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.

Meanwhile, the growth in industrial production is seen accelerating to 2.9% in August 2014, from 0.5% in July 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil industrial production data for August 2014 after market hours today, 10 October 2014.

Meanwhile, the situation de-escalated along the 192-km long Indo-Pak International Border in Jammu. There was no cross-border firing during yesterday night and today along the International Border in Jammu and Samba districts, according to reports. But Pakistani forces reportedly opened fire on four Indian border out posts in Kathua district of the Jammu and Kashmir. The International Border (IB) has witnessed heavy firing for nine days that has left eight persons dead and injured nearly 90 people, including 13 securitymen. Over 32,000 people have fled from their homes leaving 113 hamlets deserted along the IB, according to reports.

European stocks edged lower today, 10 October 2014, amid concern the region's central bank will face obstacles in its measures to revive the region's economy. Key benchmark indices in France, Germany and UK shed 0.72% to 0.9%.

Differences between the European Central Bank (ECB) and Germany over the steps needed to revive the euro-area economy came to the fore yesterday, 9 October 2014. Speaking in Washington, ECB President Mario Draghi pledged to keep monetary policy loose and urged those governments with the room to ease fiscal policy to do so. By contrast, German Finance Minister Wolfgang Schaeuble warned against US-style quantitative easing and urged continued budgetary discipline. Draghi said there are signs the region's recovery is losing momentum.

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

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.

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 0.62% to 1.82%. 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.

In Japan, minutes from a central bank meeting showed that one board member warned of possible negative effects of additional stimulus. The comment indicated that not all board members were comfortable with aggressively easing policy further.

Trading in US index futures indicated that the Dow could fall 6 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.

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