Markets jumped almost 1% in opening trades led by buying in IT stocks after better than expected results by Infosys. The Nifty opened up 35 points, at 5,016 and Sensex advanced 123 points, at 16,620.
Infosys rallied almost 5% to Rs 2,617 after it reported slightly better than expected results for the July to September quarter. Net profit after tax was reported at Rs 1,906 crore against Rs 1,702 crore in the previous quarter, up 9.7% y-o-y. Reuter’s poll expected consolidated net profit at Rs 1,891 crore. Revenues grew by 16.6% to Rs 8,099 crore.
In its FY12 guidance the company expects a growth of 17.1-19.1% as against earlier 18-20%. While the numbers were slightly better than expect, global uncertainties may affect revenue growth going forward. “The global macro-economic environment is still uncertain. It should be a concern for the IT industry,” said SD Shibulal, CEO and Managing Director of Infosys.
Other shares from the IT pack - TCS, up 3% and Wipro, up 4% were also leading the gains. Infosys, TCS and Wipro contributed 100 points to the Sensex in morning trades.
Across Asia, markets declined on Wednesday morning after Slovakia parliament failed to pass a resolution for expansion of the Euro-zone’s bailout fund. Japan's Nikkei average was down 0.6%, the Hang Seng index declined 0.6% and China's Shanghai Composite bucked trend, up 1%.
Back in India, technical analysts said the momentum setup was in favour of the bulls. If the Nifty crosses important resistance of 5,050, it can scale to 5,200. “Current pull back is a good buying opportunity in the range of 4950-4890. Maintain our bullish stance for the target of 5170-mark,” said Emkay Research in the morning note.
Among the macro-indicators, the index of industrial production (IIP) data will be out around noon. Reuter’s poll expects IIP data around 5%, higher than 3.3% reported in July, which was the weakest in two years.
On the Sensex, other prominent gainers were Reliance Industries, ITC and ICICI Bank, up almost 1% each. Tata Motors was the top loser, down over 2%, DLF and Mahindra & Mahindra also declined around 1% each.
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BSE Auto shares reversed gear, the index was down 0.4%. Besides Tata Motors and M&M, Bharat Forge slipped 0.1%.
From the broader markets, the midcap and the smallcap indices were up around 0.5% each.
Market breadth was positive, 910 stocks advanced for 413 stocks which declined.