Nifty ends near 8,600; RIL up 2%, Infosys dips post Q2 earnings

Benchmark indices ended marginally higher, amid a volatile trading session, after gains in oil & gas shares helped offset losses in Infosys and Hindustan Unilever. 

Infosys dropped around 2% after it lowered its revenue guidance was down 1.5%. The IT major lowered its revenue guidance for FY17 to 8%-9% from 10.5%-12% in constant currency terms.  

Commentating on Infosys 2QFY2017 results, Sarabjit Kour Nangra, VP Research- IT, Angel Broking said, “Infosys posted results much above expectation. The company reported 3.5% sequential growth posting revenues of US$2,587mn V/s US$2,561mn as expected. On Constant Currency (CC) terms, it posted a QoQ growth of 3.9%, while the volume growth came in at 4.0%. On the operating margin front, the EBIT margins came in at 24.9% V/s 24.5% expected, a 78bps QoQ expansion, this came on back of the high volume growth. Infosys downgraded the guidance to 8-9% CC growth on back of specific risk and a part on back of the macro dynamics. We maintain our “BUY” rating on the stock with target price to be revised".

 
Besides, the wholesale price index (WPI)-based inflation declined to a three-month low of 3.57% in September, from 3.74% in the previous month as food inflation fell sharply by 2.48 percentage points.

The benchmark S&P Sensex closed at 27,673 levels, up 30 points or 0.1%. Nifty50 index gained 10 points, or 0.1%, to close at 8,583 levels. The broader markets outperformed the benchmark indices. The S&P BSE Midcap and Smallcap rose 0.8% each.

In overseas stock markets, European stocks were higher after stronger-than-anticipated inflation data from China helped to calm nerves over global growth prospects.

Asia stocks were trading higher, reversing some early losses, as investors weighed price increases in China and the possibility of a US interest rate hike later in the year.

Meanwhile, China's producer price index edged up 0.1% in September from a year earlier, reversing a 0.8% on-year drop in August, the National Bureau of Statistics said.

Back home, the rupee appreciated by 11 paise to 66.83 against the dollar on Friday at the Interbank Foreign Exchange on fresh selling of the American currency by exporters.

SECTORS & STOCKS

BSE Oil & Gas, Energy, Capital Goods and Realty indices were down 1%-2%. However, metal, IT and FMCG sectors ended marginally negative.

Infosys slipped over 2% at Rs 1,026, after hitting 52-week low of Rs 996 in an intra-day trade on the BSE. Infosys reported a better than expected 4.9% growth in consolidated net profit at Rs 3,606 crore for the second quarter ended September 30, 2016 (Q2FY17) over the preceding quarter. Rupee revenue grew 3.1% to Rs 17,310 crore and dollar revenue was up 3.5% at USD 2,587 million on sequentially.

Tata Consultancy Services (TCS) moved higher by 2%, after hitting an intra-day low of Rs 2,299. The company posted 0.3% sequential growth in USD revenues to US$ 4,374 million for the second quarter ended September 30, 2016 (Q2FY17). While TCS beat estimates on margin and net profit growth, but missed expectation on topline growth.

Shares of oil & gas companies ended firm with Oil and Natural Gas Corporation (ONGC), Petronet LNG and Gail (India) hitting their respective 52-week highs on the BSE in intra-day trade. Petronet LNG, Gail (India) and ONGC were up between 2%-5% on the BSE.

According to Reuters report, oil prices edged up supported by record Indian crude imports and upcoming talks between OPEC producers and other oil exporters on curbing output to end a glut in the global market.

Hindustan Unilever ended down 2.3% to Rs 842 on BSE after the company’s parent Unilever lowered its outlook for India.

Larsen & Toubro (L&T) moved higher by over 2% on the BSE after the company said it has won a major order worth Rs 3,799 crore from the Dedicated Freight Corridor Corporation of India (DFCCIL).

Among other shares, Zee Entertainment Enterprises plunged 4% to Rs 527 on the BSE, extending its previous day’s nearly 4% fall, after a media report stating that the Subhash Chandra-promoted company plans to buy Anil Ambani-owned Reliance Broadcast Networks for Rs 1,872 crore.

Infrastructure major Hindustan Construction Company (HCC) in joint venture with VCCL has won an Rs 367.72 crore order for construction of safety tunnel in Manipur. The stock surged over 6%.

Reliance Communications, India's fourth-biggest cellular carrier by customer base, said on Friday it signed a non-binding term sheet with Brookfield Infrastructure Group to sell its tower assets in a deal that could fetch it an upfront Rs 11,000 crore rupees ($1.65 billion). The stock gained by 2%.