Markets slumps to lows of the day

IT index slumps, Infy down 9%

Markets have extended losses are trading at the day's low. The Sensex has slumped to a low of 17,206, following a dismal guidance outlook from IT major Infosys which overshadowed a better than expected IIP growth. The Nifty is down 80 points at 5,227.

Infosys cut its sales outlook for this fiscal year amid worries clients will reduce spending on outsourcing services due to global economic uncertainty, sending its shares down nearly 9 percent. The IT-major reported a marginal decline of 1.2% in consolidated net profit at Rs 2,289 crore for the quarter ended June 2012. It was Rs 2,316 crore in the previous quarter ended March 31.

The country's industrial output picked up more than expected in May, bolstering the case for the Reserve Bank of India (RBI) to keep interest rates high at its next policy meeting as a slow start to the monsoon puts pressure on inflation, especially food prices. IIP rose 2.4 percent in May from a year earlier, driven by manufacturing growth, data released on Thursday showed.

Meanwhile, in Asia markets dipped lower as rate cuts in different places and Bank of Japan's policy tweaks failed to impress investors. Hang Seng, Kospi and Nikkei shed 1.5-2% each.

BSE IT index has slumped 5.7% to 5,351 following the Infosys guidance. Realty, consumer durables, capital goods and bankex have shed 1-2% each.

The broader markets, however, has managed to outperform the benchmark. BSE mid-cap index has slipped 1% to 6,236 while small-cap index is down 1% at 6,717.

Among individual stocks, IT shares are leading the decline. Infosys is the biggest loser - down 9% at Rs 2246. TCS, which is slated to come out with its quarterly numbers later today, accounts for a 22 points loss on the Sensex. Wipro is down 3.5% at Rs 361.

Bharti Airtel has shed 2.6% at Rs 307. Auto and metal shares are in the red - Mahindra & Mahindra, Jindal Steel, Tata Motors and Tata Steel have declined around 2% each. Market heavyweight - Reliance is down 0.7% at Rs 721.

Meanwhile, ONGC has managed to hold on to gains and is up 1% at Rs 281. Hero MotoCorp and HUL are up marginally as well.

BSE market breadth continues to be negative. Out of 2587 shares traded, 1633 shares have declined while 841 shares have advanced in trades.