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IT stocks drop post Infosys' Q4 results

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Capital Market
Last Updated : Apr 14 2017 | 12:01 AM IST

Key indices were trading with small losses after hovering in narrow range in negative terrain in morning trade. At 10:20 IST, the barometer index, the S&P BSE Sensex, was down 52.90 points or 0.18% at 29,590.58. The Nifty 50 index was down 16.80 points or 0.18% at 9,186.65. Sentiment was subdued after data showed after market hours yesterday, 12 April 2017 that industrial production contracted in February while consumer inflation edged up in March.

Infosys declined after announcing Q4 results. Other IT stocks also declined post Infosys' Q4 results. Telecom stocks were mixed.

The BSE Mid-Cap index was up 0.1%. The BSE Small-Cap index was up 0.52%. Both these indices outperformed the Sensex.

The breadth, indicating the overall health of the market, was positive. On the BSE, 1,357 shares rose and 857 shares fell. A total of 97 shares were unchanged.

Infosys declined 2.12% after the company said that consolidated net profit as per International Financial Reporting Standards (IFRS) fell 2.8% to Rs 3603 crore on 0.9% decline in revenue to Rs 17120 crore in Q4 March 2017 over Q3 December 2016. The result was announced before market hours today, 13 April 2017.

As per the company's outlook revenues on consolidated basis for the financial year ending 31 March 2018, under IFRS is expected to grow 6.5%-8.5% in constant currency. Revenues are expected to grow 2.5%-4.5% in Rupee terms based on the exchange rates as of 31 March 2017.

Shares of other IT stocks also declined. HCL Technologies (down 0.95%), TCS (down 1.97%), Tech Mahindra (down 0.59%), Oracle Financial Services Software (down 0.14%), MphasiS (down 0.02%) and Wipro (down 1.18%) edged lower.

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State Bank of India rose 0.75%. The bank has clarified with respect to news titled "SBI branch opened 2,000 accounts to channelise black money, that all the new accounts during the period of demonetisation were opened after complying with the KYC guidelines. The bank said that news report claims are false.

Telecom stocks were mixed. MTNL (up 2.94%), Tata Teleservices (Maharashtra) (up 1.5%) and Idea Cellular (up 0.63%) gained. Bharti Airtel (down 0.34%) and Reliance Communications (RCom) (down 0.68%) declined.

Shares of Bharti Infratel fell 0.68%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.

On macroeconomic data front, industrial production declined 1.2% in February 2017 over February 2016, snapping 3.3% growth recorded in January 2017. The manufacturing sector's production dipped 2% in February 2017, mainly contributing to the dip in industrial production.

The inflation based on consumer price index (CPI) increased to 3.81% in March 2017 (new base 2012=100), compared with 3.65% in February 2017. The corresponding provisional inflation rate for rural area was 3.75% and urban area 3.88% in March 2017 as against 3.67% and 3.55% in February 2017. The core CPI inflation rose marginally to 4.79% in March 2017 from 4.75% in February 2017. The CPI and IIP data was announced after market hours yesterday, 12 April 2017.

Overseas, Asian stocks were mixed. China's exports rose 14.8% in the first quarter from a year earlier in yuan terms, extending an 11% increase in the first two months, official data showed. Imports in the January to March period increased 31.1% in yuan terms from a year earlier, compared with a 34.2% rise in the first two months, the General Administration of Customs said in a release.

China's trade balance returned to a surplus in March, helped by renewed strength in exports after a surprise deficit in February. The balance between exports and imports came to a surplus of $23.93 billion in March, compared with a deficit of $9.15 billion in February, the General Administration of Customs said. Exports rose 16.4% in March from a year earlier, following a 1.3% drop in February. Imports continued to expand rapidly, growing 20.3% in March compared with February's 38.1% increase.

US stocks closed modestly lower yesterday, 12 April 2017 led by industrial and materials companies on another day of subdued trading ahead of the long Easter holiday weekend.

Meanwhile, US Secretary of State Rex Tillerson met with the Russian counterpart Sergei Lavrov to discuss the civil war in Syria and nuclear capabilities of North Korea. In recent days, the trading mood has been dented by heightened geopolitical tensions.

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First Published: Apr 13 2017 | 10:24 AM IST

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