Markets Hold Morning Gains, Infosys Disappoints

As expected in our morning updates, the Indian markets opened in the positive territory today. At present, both the indices are trading higher, with the Sensex up by 29 points at 17361 and Nifty up by 14 points at 5209. Among the sectors, Capital Goods, Auto, FMCG, etc. are trading higher by more than 1.50% each. IT and Teck plunged on the bourses, trading lower by 6.22% and 4.54% respectively on the back of disappointing numbers and guidance from Infosys.

Other Asian markets too are trading higher. Hang Seng and Shanghai are trading higher by more than 1%, while Nikkei is trading marginally in the green zone. The markets gained on the back of speculations that the Chinese government may take actions to further fuel growth in the economy.

Back home, Auto stocks have risen on the back of expectations that the RBI may cut the rates in its next monetary policy meet due on Tuesday, April 17. Stocks like Tata Motors, Bajaj Auto and Maruti Suzuki are among the leading index gainers, up more than 1.60%. The banking players are also trading higher, with SBI and ICICI Bank both up by 1.60%. Other stocks like Hindalco, DLF, HDFC, etc. are trading marginally in the green zone.

On the other hand, the IT stocks are trading lower, taking off some of the market gains. Infosys is among the leading index losers, down 9.14% to Rs 2498 after the company disappointed the street with its March 2012 quarter results. It reported Net Profits of Rs 2316 crore for the quarter, which is 27% higher on a YoY basis but down 2.4% on a QoQ basis. Further, Infosys' guidance for FY13 was below market expectations. As per the management, the revenues are expected to grow at around 8% in FY13 as against the street's expectations of 12%-14%. TCS and Wipro are also trading lower by 4.10% and 3.05% respectively on the back of speculations that they may show a weak performance in their March results and give a muted growth outlook.

MT Educare and NBCC, which were listed yesterday, continued their respective trends in today’s trading session. MT Educare is trading higher 5% at Rs 94.85, extending yesterday’s gains. NBCC continued its losses from yesterday, and is trading lower by 3.45% at Rs 93.70.

The market breadth, which indicates the overall health of the market, is strong. On the BSE, 1389 shares rose and 691 shares declined. 102 shares remained unchanged.

We expect the market to remain volatile for the day, with a negative bias.