Gains in index heavyweight Infosys and telecom stocks aided the upmove for key benchmark indices. At 10:15 IST, the barometer index, the S&P BSE Sensex was up 80.53 points or 0.31% at 25,707.28. The Nifty 50 index was currently up 21.30 points or 0.27% at 7,871.75. Infosys surged after the company issued strong revenue growth guidance for the year ending 31 March 2017 (FY 2017) at the time of announcement of its Q4 March 2016 results.
Earlier, high volatility was witnessed on the bourses as key benchmark indices came off after a firm opening triggered by a rally in the Infosys counter. The Sensex hit 15-week high when it jumped 243.28 points or 0.94% at the day's high of 25,870.03 at the onset of trading session. The barometer index gained 7.37 points or 0.02% at the day's low of 25,634.12 in early trade. The Nifty, too, hit 15-week high when it rose 62.20 points or 0.79% at the day's high of 7,912.65 at the onset of trading session, its highest level since 4 January 2016. The index fell 7.70 points or 0.09% at the day's low of 7,842.75 in early trade.
The market breadth indicating the overall health of the market turned positive from negative in morning trade. On BSE, 1,046 shares gained and 845 shares declined. A total of 96 shares were unchanged. The BSE Mid-Cap index was currently up 0.73%. The BSE Small-Cap index was currently up 0.64%. Both these indices outperformed the Sensex.
In overseas stock markets, Asian markets dropped after major oil producers failed to reach an agreement to freeze production in Doha over the weekend. Japanese stocks edged lower as the yen strengthened against the dollar in the wake of earthquakes in the Kumamoto prefecture since last week, including on Saturday, 16 April 2016. The Nikkei 225 index was currently off 2.99%. The stronger yen makes Japanese exports less competitive and cuts into the value of repatriated earnings. US stocks closed modestly lower on Friday, 15 April 2016, as a retreat in oil prices weighed on energy shares.
Shares of IT major Infosys jumped after the company forecast strong revenue growth for the year ending 31 March 2017 (FY 2017) at the time of announcement of its Q4 March 2016 results on Friday, 15 April 2016, when the stock market was closed for a holiday. The stock was up 6.5% to Rs 1,248. The stock hit a high of Rs 1,267.70 in intraday trade so far, which is also record high for the counter. The stock hit a low of Rs 1,239.10 so far during the day. Infosys expects revenue growth of 11.8%-13.8% for FY 2017 in US dollar terms. In constant currency terms, the company has forecast 11.5%-13.5% growth in revenue for FY 2017. Infosys' revenue growth forecast is higher than 10% to 12% growth for the IT outsourcing sector for FY 2017 forecast by IT industry body National Association of Software and Services Companies (Nasscom) in February this year. Infosys has forecast 12.7%-14.7% growth in revenue in rupee terms for FY 2017 based on rupee dollar exchange rate of 66.26 as on 31 March 2016.
Infosys' consolidated net profit rose 3.8% to Rs 3597 crore on 4.1% growth in revenue to Rs 16550 crore in Q4 March 2016 over Q3 December 2015. The results are as per International Financial Reporting Standards (IFRS). Infosys said that the employee attrition reduced further in Q4 March 2016. On annualized basis, the employee attrition rate declined to 17.3% in Q4 March 2016 from 18.1% in Q3 December 2015.
After the strong revenue growth guidance for FY 2017, Infosys' ADR jumped 8.4% to settle at $20 on the New York Stock Exchange on Friday, 15 April 2016.
IT stocks gained after IT major Infosys issued a strong revenue growth guidance for the year ending 31 March 2017 (FY 2017). HCL Technologies (up 1.22%), Oracle Financial Services Software (up 1.17%), Tech Mahindra (up 1.27%), Wipro (up 0.1%), Hexaware Technologies (up 0.92%) and MphasiS (up 2.04%) rose.
IT major TCS dropped 2.05% after a US court reportedly slapped nearly $1 billion penalty on the company for allegedly stealing information related to US-based Epic Systems' healthcare software. TCS, however, denied the charges and said it would appeal. In a statement issued on Saturday, 16 April 2016, TCS said that the jury's verdict on liability and damages was unexpected, as the company believes it is unsupported by the evidence presented during the trial. The company added that it did not misuse or derive any benefit from downloaded documents from Epic System's user-web portal. TCS said it plans to defend its position vigorously in appeals to higher courts. The company said it appreciates the trial judge's announcement from the bench that he is almost certain he will reduce the damages award. The jury verdict will not have any impact on the company's Q4 March 2016 and FY 2016 financial results, TCS said. TCS is set to announce its Q4 March 2016 results today, 18 April 2016.
Private bank stocks were mixed. Kotak Mahindra Bank (down 1.35%), ICICI Bank (down 2.18%), IndusInd Bank (down 0.81%) declined. Yes Bank (up 0.44%) Federal Bank (up 1.01%), HDFC Bank (up 0.05%) and Axis Bank (up 0.18%) rose.
PSU bank stocks declined. State Bank of India (SBI) (down 2.24%), Punjab National Bank (down 3.02%), Andhra Bank (down 1.77%), Bank of Baroda (down 2.49%), Canara Bank (down 1.91%), IDBI Bank (down 1.72%), Bank of India (down 1.8%) and Union Bank of India (down 2.55%) dropped.
Reserve Bank of India (RBI) Governor Raghuram Rajan said in an interview to a newspaper in Washington on Thursday, 14 April 2016, that if the monsoon is good, if inflation continues on a downward path and if there is continuing progress on food management reforms that reduce costs it will provide room for the RBI to further reduce policy interest rate. Recently, the weather office forecast good rains during the June-September 2016 southwest monsoon season. The RBI cut its benchmark policy rate viz. the repo rate by 25 basis points to 6.5% from 6.75% after a scheduled policy review on 5 April 2016. At that time, Rajan had indicated in his monetary policy statement that the RBI might cut the repo rate further in the coming months if macroeconomic and financial developments provide room for further rate cut. The RBI next undertakes monetary policy review on 7 June 2016.
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