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Index heavyweights see divergent trend

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Capital Market
Last Updated : Oct 12 2015 | 1:13 PM IST

Amid divergent trend among five index heavyweights, key benchmark indices languished in negative zone in early afternoon trade. At 12:16 IST, the barometer index, the S&P BSE Sensex, was off 32 points or 0.12% at 27,047.51. The 50-unit CNX Nifty was down 7 points or 0.09% at 8,182.70. Index heavyweights HDFC, ITC and Infosys were in red whereas two other index heavyweights Reliance Industries and L&T hovered in green. Shares of IT major Infosys edged lower in choppy trade after the company lowered its full year revenue growth guidance in dollar terms for the year ending 31 March 2016 (FY 2016) at the time of announcement of Q2 September 2015 results.

The market breadth indicating the overall health of the market was positive. On BSE, 1,280 shares gained and 1,098 shares fell. A total of 94 shares were unchanged. The BSE Mid-Cap index was up 0.34%. The BSE Small-Cap index was up 0.37%. Both these indices outperformed the Sensex.

In overseas stock markets, Chinese stocks led gains in Asian markets on stimulus measures from China and signals of reform in China's telecommunications sector. In mainland China, the Shanghai Composite was currently up 3.13%. China's central bank announced over the weekend that it will expand a relending trial to nine more cities and provinces, including Shanghai and Beijing. The plan, currently in place in Shandong and Guangdong, allows banks to pledge certain assets to secure loans from the central bank.

Closer home, shares of power generation firms gained. Adani Power (up 11.26%), Reliance Power (up 5.74%), JSW Energy (up 2.03%), GVK Power & Infrastructure (up 1.02%), Jaiprakash Power Ventures (up 2%), Reliance Infrastructure (up 2.34%), Torrent Power (up 0.45%), NHPC (up 1.17%), Tata Power (up 1.01%) and NTPC (up 0.36%) edged higher.

Shares of state-run power transmission major Power Grid Corporation of India (PGCIL) were up 0.6% at Rs 133.10.

Telecom stocks edged higher. Tata Teleservices (Maharashtra) (up 3.85%), Reliance Communications (up 1.79%), Mahanagar Telephone Nigam (up 0.3%) and Bharti Airtel (up 0.46%) gained. Idea Cellular (down 0.03%) edged lower.

Shares of IT major Infosys edged lower in choppy trade after the company lowered its full year revenue growth guidance in dollar terms for the year ending 31 March 2016 (FY 2016) at the time of announcement of Q2 September 2015 results. The stock was off 2.56% at Rs 1,138. The stock hit a high of Rs 1,219 so far during the day, which is a record high for the counter. The stock hit a low of Rs 1,108.90 so far during the day. Infosys now expects its revenue to grow 6.4%-8.4% in dollar terms for FY 2016. At the time of announcing Q1 June 2015 results, Infosys had forecast revenue growth of 7.2%-9.2% in dollar terms for FY 2016.

The revenue growth guidance for FY 2016 has been kept unchanged at 10%-12% in constant currency terms.

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Thanks to weakness of the rupee against the dollar, Infosys has raised full year revenue growth guidance in rupee terms. Infosys now expects its revenue to grow 13.1%-15.1% in rupee terms in FY 2016. At the time of announcing Q1 June 2015 results, Infosys had forecast 11.5%-13.5% growth in the company's revenue in rupee terms for FY 2016. The revised guidance is based on rupee dollar exchange rate of 65.59.

Infosys' consolidated net profit rose 12.1% to Rs 3398 crore on 8.9% growth in revenue to Rs 15635 crore in Q2 September 2015 over Q1 June 2015. The results are as per International Financial Reporting Standards (IFRS). The result was announced during market hours today, 12 October 2015.

Meanwhile, Rajiv Bansal has stepped down as Chief Financial Officer (CFO) of Infosys effective 12 October 2015. Ranganath M. D. has been appointed as the new CFO.

Hindustan Construction Company rose 3.34% at Rs 23.20 after the company said it has secured a contract worth Rs 942.58 crore from BARC for constructing the first phase of integrated nuclear recycle plant of BARC at Tarapur in Maharashtra. The company made announcement during market hours today, 12 October 2015.

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First Published: Oct 12 2015 | 12:18 PM IST

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