Sensex tanks 257 pts as Infy lets markets down

With Infosys flashing its poor first quarter numbers before market hours in the morning, the BSE benchmark index opened a steep 192 points down.

As details poured in, the mood worsened and all IT stocks, led by Infosys, took a severe beating with Sensex losing over 300 points intra-day.

The index finally closed down by 256.59 points at 17,232.55, logging its biggest single-day fall after June 1.

Infosys shares cracked over 8 per cent as investors were disappointed with revised FY 2013 dollar revenue growth guidance of 5 percent compared to 8-10 percent given in April.

The country's second largest software firm reported a consolidated net profit of Rs 2,289 crore and sales of Rs 9,616 crore for the first quarter ended June 30.

"Infosys results disappointed on all counts... The key issue now is will a price war start in the sector and hence even other companies could start exhibiting signs of strain," said Bhuvnesh Singh, analyst, Barclays.

The lower-than-expected Infosys numbers had a cascading effect across IT scrips with TCS losing 1.80 per cent and Wipro shedding 4 per cent.

BSE IT index at 5.11 per cent was day's worst performer.

As many as 21 stocks in Sensex today lost value with Bharti, M&M, Tata Motors and L&T losing in the 1.75-3 per cent range as weak Asian cues and lower opening in Europe hit mood.

Similarly, the 50-share NSE index Nifty fell 71.05 points, or 1.34 per cent, to 5,235.25, dipping below key 5,300 level.

Brokers said investors ignored positive cues from provisional May IIP data as April's number was revised lower.

"While May IIP growth has shown some positive surprise... we suspect that the final growth number may be much weaker," said Dhananjay Sinha, Co