12th April, 2013 : Market echoes Infy woes

iiflWhat a dreadful day for the market in general and Infosys in particular! The Indian equity indices ended with deep cuts on Friday as sentiment got hit post disappointing quarterly earning announced by Infosys. The stock plunged over 25% in a single trading session registering its biggest single day fall since April 2003.

After an initial decline, the stock was unable to stage any sort of come back as it witnessed constant selling pressure throughout the day. Infosys was the top laggard. Stocks like ITC, SBI and Hindustan Unilever were the saving grace for the markets.

Market participants were so disappointed with the Infosys fiasco that they completely ignored better than expected Industrial Production data and Consumer price index data. February IIP stood at 0.6% as compared to the 2.4% in the month of January 2013.

March Consumer Price Indices (CPI) stood at 10.39% (slightly higher than rural and urban rates of March 2013 due to rounding) as compared to 10.91% (final) for the previous month of February 2013.

The corresponding provisional inflation rates for rural and urban areas for March 2013 are 10.33% and 10.38% respectively. Inflation rates (final) for rural and urban areas for February 2013 are 11.01% and 10.84% respectively.

“While the Net profit numbers of Infosys came marginally ahead of estimates it was largely due to a beat on other income and not on the operational front. In the coming week, corporate earnings and management commentary will be keenly analysed for clues on meaningful improvement in business sentiment. In terms of data points, watch out for the latest Indian inflation numbers, Import-Export data and jobless claim report in US besides of course corporate numbers,” says Amar Ambani, Head of Research, IIFL.

On the global front, Asian shares were trading mixed with Nikkei recovering from its early lows. The Nikkei was down 0.6% and Shanghai Composite slipped 0.2%, while Hang Seng and Straits Times ended with marginal gains.

 On the currency front, Dollar/Rupee moved up ahead of retail data and reading of producer prices and consumer confidence. Concern that the US Fed may cut short its stimulus program and Cyprus may sell a chunk of its gold reserves also continue to subdue sentiment and buy Dollar. Dollar/Rupee rebounded in afternoon to Rs54.60/$1 compared to Rs54.50/$1.

 Among the sectoral indices, the BSE IT index was the top loser, down 11%, followed by BSE Teck index 8.8% and BSE Capital Goods index down 0.7%. Among the top gainers, BSE FMCG index was up 2% followed by BSE Power and the Banking index up 1% each.

 The Mid-Cap and the Small-Cap stocks were under pressure through the day.

Finally, BSE Sensex closed at 18242, down 299 points over the previous close. It had earlier touched a day’s high of 18337 and a day’s low of 18186. It opened at 18275.

The NSE Nifty closed at 5,529, down 65 points over the previous close. It earlier touched a day’s high of 5,544 and a day’s low of 5,494. It opened at 5,520.

RIL, Tata Power, BHEL, HDFC Bank, SBI, ITC, Tata Steel, Dr Reddy’s Lab, NTPC, Sterlite Inds and Hero MotoCorp were among gainers in Sensex and Nifty.

Infosys, TCS, Wipro, Coal India, Maruti Suzuki, Bharti Airtel, Jindal Steel, Sun Pharma, Tata Motors and L&T were among losers in Sensex and Nifty.

The advance-decline ratio was in favour of the bears. On the BSE, 1259 stocks declined against 1044 advancing stocks, while 141 stocks remained unchanged.

The INDIA VIX was down 3% to close at 16.45. It hit a day’s high of 17.26 and low of 16.33.

Stocks which hit a 52-week high during the week were Lupin, Raasi Refrac, Nilachal Refractories, Sam Leaseco and Grandma Trad.

Stocks which hit a 52-week low during the week were Bajaj Elect, Binani Inds, Mangalore Ref, SAIL, Godfrey Phil and Hindustan Const

Stocks in News

 Tata Steel edged higher by 0.3%. The company announced the merger of Tata Metaliks Ltd and Tata Metaliks Kubota Pipes Ltd with itself. It is approved by its board of director through a scheme of amalgamation to be sanctioned through a Court approval process.

State Bank of India gained by 2% after the company approached international bond market to raise about Rs5,4.30bn in a five-year dollar bond sale programme.