Weak Infy Results Drag Markets Down
DSIJ Intelligence / 12 Jul 2012
As expected in our morning update, the Indian markets opened negative today on the back of weak quarterly earnings reported by IT bellweather Infosys, which has also reduced its dollar revenue guidance from 8%-10% to 5%.
As expected in our morning update, the Indian markets opened negative today on the back of weak quarterly earnings reported by IT bellweather Infosys, which has also reduced its dollar revenue guidance from 8%-10% to 5%. This has shocked investors, who were expecting better results from the company for the quarter. The Sensex and Nifty are down by 1.42% and 1.24% respectively.
All the other major IT companies which are due to announce their Jun 2012 quarter results now under pressure. Among the BSE sectoral indices, IT has been beaten down heavily by 5.57%, and the other major losers are Teck and Realty, which are down by 4.61% and 1.73% respectively. Among the gainers, Oil & Gas, FMCG and HC are up by 0.37%, 0.11% and 0.02% respectively.
The Asian markets have opened today on a mixed note today. All the major indices have lost their gains and are currently trading in the red. This is after the unexpected move of South Korea's central bank to cut interest rates and Australia's announcement about the rise in unemployment. Concerns over the health of the Chinese economy have risen ahead of the second quarter growth data that is expected to come in on Friday, which will be used as a key indicator to gauge the health of Asia's largest economy.
| Benchmark Indices | ||
|---|---|---|
| Index | Rate | % Change |
| Hang Seng | 19109 | -1.62 |
| Nikkei | 8741.24 | -1.25 |
| Shanghai | 2169.35 | -0.28 |
| SENSEX | 17240.20 | -1.42 |
| NIFTY | 5240.23 | -1.24 |
From the Sensex shares, Infosys is leading the chart with losses of more than 9% at Rs 2246 after the company reported weak sequential numbers for the Jun 2012 quarter and weak guidance for the year. Other IT major companies such as TCS and Wipro too are feeling the heat and both the scrips are down by 1.06% and 4.21% respectively.
In individual stocks, M&M and JSW Steel slipped after the scrips became ex-dividend.
The market breadth, which indicates the overall health of the market, is negative. On the BSE, 1182 shares have declined and 622 shares have risen. 70 shares are unchanged.
We expect the markets to remain negative. The opening of the European market and the IIP numbers will provide vital cues for the market direction.
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